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    Ross Charap and Paul Fakler Comment on Pandora Ruling

    September 20, 2013

    Intellectual Property partners Ross Charap and Paul Fakler talked with Law360 after a federal judge ruled on that the American Society of Composers, Authors and Publishers (ASCAP), which represents thousands of members, cannot prevent Pandora Media from licensing all of the songs in its catalog.

    Law360 reported that ASCAP, “is governed by a 70-year-old antitrust settlement with federal prosecutors, and the judges enforcing it impose tough scrutiny in an effort to make sure the rates charged to users like Pandora do not rise above a ‘reasonable’ level.” The ruling was viewed as a blow to music publishers, who have limited the extent that performing rights societies like ASPCA represent their songs in an effort to get the best royalty rates for digital music.

    “I immediately knew this wasn't going to work,” said Mr. Charap. “These consent agreements simply do not let you grant parts of your repertory, and that's basically what the court decided yesterday.

    The BMI Rate Court will likely reach the same decision in the Pandora proceeding pending there. “All these same issues are going to be raised, and there's really not much room for it to come out differently,” said Mr. Fakler. “It was a very lucid, very clear opinion.” Mr. Fakler added that as a result of the decision, the publishers are probably stuck with the old system for ASCAP and Broadcast Music, Inc. (BMI), and that while they could remove all of their works from both rights organizations, it would be nearly impossible to do.

    “I don't think as a practical matter that they can do it,” said Mr. Fakler, while stressing that publishers would have to seek individual licenses with every bar, restaurant, stadium, and radio station in the country, if they withdrew from ASCAP and BMI.