337 F.Supp. 394 (S.D.N.Y. 1972), 69 Civ. 5740, Columbia Broadcasting System, Inc. v. American Soc. of Composers, Authors and Publishers

Docket Nº:69 Civ. 5740.
Citation:337 F.Supp. 394
Party Name:172 U.S.P.Q. 355 COLUMBIA BROADCASTING SYSTEM, INC., Plaintiff, v. AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, et al., Defendants.
Case Date:January 20, 1972
Court:United States District Courts, 2nd Circuit
 
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Page 394

337 F.Supp. 394 (S.D.N.Y. 1972)

172 U.S.P.Q. 355

COLUMBIA BROADCASTING SYSTEM, INC., Plaintiff,

v.

AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, et al., Defendants.

No. 69 Civ. 5740.

United States District Court, D. New York

Jan. 20, 1972

Page 395

Cravath, Swaine & Moore, New York City, for plaintiff; Alan J. Hruska, Robert K. Baker, Ronald S. Rolfe, John A. Lucido and J. Barclay Collins, New York City, of counsel.

Page 396

Paul, Weiss, Rifkind, Wharton & Garrison, Herman Finkelstein, New York City, for ASCAP and defendants Coleman, Hamilton, Schwartz and Washington; Simon H. Rifkind, Jay H. Topkis, Allan Blumstein, and Max Gitter, New York City, of counsel.

LASKER, District Judge.

This is a civil antitrust action by Columbia Broadcasting System, Inc. ("CBS") against American Society of Composers, Authors and Publishers ("ASCAP") and others for alleged violations of the Sherman Act. ASCAP and the defendants who are members of its board of directors move, pursuant to Rule 56, Fed.R.Civ.P., for summary judgment dismissing the complaint. For the reasons set forth below, the motion is denied.

ASCAP is an unincorporated association of approximately 17,500 authors, publishers and composers of musical compositions which was organized in 1914. Its members have granted ASCAP, as their common licensing agent, the nonexclusive right to license their works. In exchange, ASCAP assists its members by distributing and collecting revenues, as well as policing and protecting the works against copyright infringement by maintaining a complex surveillance system of radio and television broadcasts.

CBS, a national radio and television broadcaster, is a licensee of ASCAP's repertory.

In 1941, the government sued ASCAP for violations of the antitrust laws. As a result of that litigation a consent decree was entered in 1941 which required ASCAP to grant licenses to users in proportion to the amount of music used. In 1950 that decree was substantially amended to remedy certain deficiencies.

Under the 1950 amended judgment, ASCAP is required to offer two types of license to the broadcasters-a "blanket" license and a "per program" license. Both licenses grant the user the right to use any or all of the works in ASCAP's repertory. The difference between the two is that the blanket license allows use of the entire inventory for a period of time-generally, in the history of the parties, one year-for which ASCAP receives a fee based upon a fixed percentage of the licensee's overall revenues for that period; whereas a per program license, as its name suggests, allows the use of the entire ASCAP inventory only for one broadcast program and the fee is based upon a fixed percentage of revenues derived from that program.

The 1950 decree also enjoins ASCAP from discrimination in fees which "would deprive the licensees ... of a genuine choice among such various types of licenses" (Par. VIII) and specifies that it must offer comparable fees to all applicants similarly situated (Par. IX(C)). Under the decree a special procedure is established for the determination of licensing fees. Upon the receipt of a license application, ASCAP is required to "advise the applicant in writing of the fee it deems reasonable for the license requested." If ASCAP and the prospective user are unable to agree upon a fee, the decree provides that the applicant "may forthwith apply to [the District Court for the Southern District of New York] for the determination of a reasonable fee ..." (Par. IX). Finally, ASCAP's licensing authority is not exclusive. The amended decree provides that prospective licensees may bypass ASCAP and secure a license directly from the individual composer, author or publisher.

I.

The thrust of CBS' complaint is that the availability of ASCAP's blanket and per program licenses is not sufficient to satisfy the commands of the Sherman Act. CBS contends that these options "compel a broadcaster to pay for the right to use all copyrighted music in the ASCAP pool, even though it might want rights only as to some of those musical compositions." (Par. 10, Complaint). In other words, CBS asserts that ASCAP

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is "using the leverage inherent in its copyright pool to insist that plaintiff pay royalties on a basis which does not bear any relationship to the amount of music performed." (Par. 19, Complaint). Finally, as to individual licensing, CBS alleges that "[a]ny attempt by plaintiff to acquire such a large body of rights from the individual members of ASCAP ... would be wholly impracticable ..." (Par. 15, Complaint).

CBS does not contend that ASCAP has violated the decree. It contends, however, that the procedures by which ASCAP operates under the 1950 amended judgment constitute illegal price fixing, boycotting, and tying. CBS asserts that the grant of a proposed "per-use" license 1 (payment measured by the actual use of copyrighted music) "would go far toward unraveling the strands with which this combination has hogtied competitive market forces since 1914."

II.

ASCAP's motion for summary judgment is predicated on the contention that the Ninth Circuit, in K-91, Inc. v. Gershwin Publishing Corp., 372 F.2d 1 (9 Cir., 1967), cert. denied 389 U.S. 1045, 88 S.Ct. 761, 19 L.Ed.2d 838 (1968), rejected the same antitrust claims that CBS now asserts here. Thus, this motion presents the narrow issue whether under the rationale of K-91 summary judgment for...

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