Broadcast Music, Inc. v. Columbia Broadcasting System

441 U.S. 1 (1979)

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Nature of the Case

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Facts

CBS (P) operates one of three national commercial television networks, supplying programs to approximately 200 affiliated stations and telecasting approximately 7,500 network programs per year. P also owns television and radio stations in various cities. In 1914, Victor Herbert and a handful of other composers organized ASCAP (D) because those who performed copyrighted music for profit were so numerous and widespread, and most performances so fleeting, that as a practical matter it was impossible for the many individual copyright owners to negotiate with and license the users and to detect unauthorized uses. ASCAP's 22,000 members grant it non-exclusive rights to license nondramatic performances of their works, and ASCAP issues licenses and distributes royalties to copyright owners in accordance with a schedule reflecting the nature and amount of the use of their music and other factors. BMI (D), a nonprofit corporation owned by members of the broadcasting industry, was organized in 1939, represents some 10,000 publishing companies and 20,000 authors and composers, and operates in much the same manner as ASCAP. Almost every domestic copyrighted composition is in the repertory either of ASCAP, with a total of three million compositions, or of BMI, with one million. Both operate through blanket licenses. Fees for blanket licenses are ordinarily a percentage of total revenues or a flat dollar amount and do not directly depend on the amount or type of music used. P purchased a blanket license. P then sued Ds in that the blanket licenses amounted to price fixing and that Ds were unlawful monopolies. P alleged a per se violation of the Sherman Act. The district court ruled that the blanket license modus operandi did not fall within a per se violation. The court dismissed P’s complaint in that because direct negotiation was available to P with individual copyright owners and was feasible, there was no undue restraint, illegal tying or monopolization. P appealed, and the court of appeals reversed, holding a blanket license a per se violation. P appealed. The Supreme Court granted certiorari.