The Statutory Monopoly for Public Performances of Musical Works: A Comprehensive Solution to the Consequences of Fractional Licensing

• Author: Samantha Davis
• Position: J.D., Georgetown University Law Center (expected May 2022); B.A., Loyola Marymount University (2019)
• Pages: 909-925

The Statutory Monopoly for Public Performances of

Musical Works: A Comprehensive Solution to the

Consequences of Fractional Licensing

SAMANTHA DAVIS*

INTRODUCTION

The Copyright Act of 1976 grants copyright owners various exclusive rights in

their works, including the right to publicly display or perform the work.

1

These

rights may be transferred to other owners or licensed for use by others.

2

Copyright owners of musical works are compensated when music users pay to

perform those works publicly, whether it be in a restaurant, retail store, radio sta-

tion, etc. It would be impossible for composers and music publishers to identify

every music user and enforce their rights, so performing rights organizations

serve as intermediaries between copyright owners and music users.

3

Different copyright holders are represented by different performing rights

organizations, requiring licensees to work with whichever organization licenses

the particular work(s) they wish to use.

4

This means that music users must pay

fees for licenses from different performing rights organizations at a time.

5

Not

only are copyright owners represented by a number of organizations, but individ-

ual works themselves can be licensed through different organizations. For exam-

ple, imagine that Bob Dylan owns 50 percent of the copyright to “Like a Rolling

Stone,” and his music publisher owns the other 50 percent. Bob Dylan is free to

license his rights through one performing rights organization, while his publisher

may license their interest through any other performing rights organization.

6

This

is known as fractional licensing.

* J.D., Georgetown University Law Center (expected May 2022); B.A., Loyola Marymount University

(2019). © 2021, Samantha Davis.

1. 17 U.S.C. § 106.

2. Id. § 201(d)(2).

3. See Jay Fujitani, CONTROLLING THE MARKET POWER OF PERFORMING RIGHTS SOCIETIES: AN

ADMINISTRATIVE SUBSTITUTE FOR ANTITRUST REGULATION, 72 CAL. L. REV. 103 (1984).

4. See David Oxenford, Court of Appeals Upholds BMI Decision Allowing Fractional Music Licensing –

What Are the Issues? BROADCAST LAW BLOG (Dec. 20, 2017), https://www.broadcastlawblog.com/2017/12/

articles/court-of-appeals-upholds-bmi-decision-allowing-fractional-music-licensing-what-are-the-issues/

[https://perma.cc/WEY8-HB8X].

5. Id.

6. Id.

909

Copyright law is intended to promote progress in science and the arts by incen-

tivizing authorship through legal protection,

7

but certain features – such as allow-

ing access through fair use and introducing works in the public domain after a

certain length of time – speak to the collective nature of copyright protection.

8

The ability for copyright holders to license their works furthers this goal by mov-

ing these works into the public sphere.

9

Both copyright owners and music users

benefit from having intermediaries, but the advantages that performing rights

organizations provide are complicated by ineffective competition.

10

Although the

introduction of additional performing rights organizations initially had an impact

on anticompetitive behavior, current regulatory issues are now a result of these

tactics.

11

This Note will propose that the Library of Congress should designate a single

organization to be the sole licensor of public performances for musical works in

order to eliminate regulatory problems like fractional licensing. Although the

United States and other countries have statutorily designated agents for copyright

licensing matters, this proposal would deviate insofar it would be limited to musi-

cal works, and licensing would still be voluntary.

12

It also leaves room for those

with significant bargaining power to negotiate directly with copyright owners,

akin to the “self-generation” principle in utilities regulation.

13

This solution is

appropriate given the need for a streamlined licensing regime that promotes the

goals of copyright law by facilitating access to public performances of musical

works.

Public performance licensing concerns a myriad of actors from the entertain-

ment industry, as well as music users, legislators, and consumers. But this issue is

substantively a legal one. Fractional licensing itself is a product of copyright law

that allows multiple people to be copyright owners of a single work.

14

Lawyers

are involved at every stage of this process, from the legislative process, to draft-

ing contracts on behalf of copyright owners, to suing infringers in court.

However, legal ethics and professional rules of conduct fall short in addressing

the structural problems of the current licensing regime. Though lawyers have an

important role to play in advocating for and shaping a competent statutory

7. U.S. CONST. art. I § 8, cl. 8.

8. See CHRISTOPHE GEIGER, WHAT IF WE COULD IMAGINE COPYRIGHT? 79 (Rebecca Giblin & Kimberlee

Weatherall eds., 2017).

9. Id.

10. See Fujinati, supra note 3.

11. See David Oxenford, BMI Judge Rejects DOJ Conclusion that Consent Decree Requires 100% of Songs –

What Does that Mean for Music Services? BROADCAST LAW BLOG (Sept. 18, 2016), https://www.

broadcastlawblog.com/2016/09/articles/bmi-judge-rejects-doj-conclusion-that-consent-decree-requires-100-

of-songs-what-does-that-mean-for-music-services/ [https://perma.cc/XG5K-RCKA].

12. Determination of Reasonable Rates and Terms for the Digital Performance of Sound Recordings and

Ephemeral Recordings, 67 Fed. Reg. 45,239 (July 8, 2002).

13. See Scott Hempling, Regulating Public Utility Performance: The Law of Market Structure, Pricing and

Jurisdiction 19 (2013).

14. See Oxenford, supra note 4.

910 THE GEORGETOWN JOURNAL OF LEGAL ETHICS [Vol. 34:909