SESAC’d Post Script

The antitrust case brought by the Television Music License Committee against SESAC detailed here previously has been settled.  SESAC agreed to pay the TMLC members $43mm as damages (i.e., excessive royalty fees) and $16mm in legal fees.  The papers are below.

 

TMLC v SESAC (Memo Re Settlement)

TMLC v SESAC (Settlement Agt)

Ice Ice Baby…

“A music rights group has become the first organization to successfully force a copyright-focused website blockade in freedom-friendly Iceland. Following a District Court ruling, ISPs including Vodafone must now block The Pirate Bay and Deildu, Iceland’s largest private torrent site.” Full story here.

History repeating itself…

Those who cannot remember the past are condemned to repeat it. George Santayana

Don Henley successfully sued retailer Dillards in 1999 over an advertisement that featured a photograph of a man wearing a henley shirt with the words, “This is Don” in large print, beside the picture, and an arrow pointing toward the man’s head from the words. Underneath the words is the statement, “This is Don’s henley” in the same size print, with a second arrow pointing to the shirt.

Along comes Duluth Trading, which sent around an email advertisement that featured a picture of a henley shirt and the words “Don A Henley and Take It Easy,” seemingly a reference to the Eagle’s breakthrough song “Take It Easy” co-written by Jackson Browne and Glenn Frey.

Henley v Duluth Trading Co Complaint by Eriq Gardner

Don’t Fence Me In…

A magistrate judge has recommended that the lawsuit brought by VerStandig Broadcasting should be dismissed on jurisdictional grounds; i.e., for lack of Article III standing. In finding that the plaintiffs’ declaratory action failed to raise a justiciable controversy, the judge found that the issue of copyright liability is not “traceable” to SoundExchange because SoundExchange does not own or enforce copyrights Verstandig might infringe. As the judge stated: “Any dispute that may arise in that scenario is between the copyright owner and the broadcaster. Thus, the copyright owners themselves, who are ‘not party to this litigation, must act’ (or not act, as the case may be) in order for this particular injury to be cured.”

WTGD 105.1FM v. SoundExchange – Magistrate Report by Legal Writer

SESACed (the saga continues)

A recent order from Judge Jones in the Eastern District of Pennsylvania provides SESAC some much needed relief, but SESAC still faces a difficult trial.  Readers will recall that the RMLC brought Sherman Act claims against SESAC for allegedly anticompetitive behavior.  Specifically, the RMLC alleged three violations:: § 1—Horizontal Price Fixing (Count I), § 1—Group Boycott/Refusal to Deal (Count II), and § 2—Monopolization (Count III). In response, SESAC filed a motion to dismiss.  Judge Jones threw out the § 1 claims, but denied SESAC’s motion regarding the § 2 (monopolization) claim. 

In analyzing SESAC’s motion to dismiss, the court concluded that the RMLC’s “§1 and §2 claims are based on the confluence of four of SESAC’s licensing practices: SESAC’s blanket license (and its refusal to offer other licensing options), its procurement of a critical mass of must-have works, its de facto exclusive dealing contracts with its affiliates and its lack of transparency as to the works in its repertory.”  Breaking down the 3 alleged violations, the court looked first at the § 1 claims (price fixing and refusal to deal) and concluded that the RMLC had failed to adequately plead a violation.

 A hub-and-spoke conspiracy requires agreements between each spoke and the hub and between and among each of the spokes themselves. Howard Hess Dental Labs., Inc. v. Dentsply Intern., Inc., 602 F.3d 237, 255 (3d Cir. 2010) (“In other words, the ‘rim’ connecting the various ‘spokes’ is missing.”). After reviewing the allegations of agreement and the parties’ respective briefs, the court has concluded that plaintiff has failed to allege sufficient facts from which the court can draw a plausible inference of a hub-and-spoke conspiracy between and among SESAC and its affiliates. In particular, the court agrees with defendants that plaintiff has failed to plead the rim of a hub-and-spoke conspiracy by failing to plausibly allege agreements among SESAC’s affiliates.

Turning next to the § 2 claim (monopoly), the court considered that “Plaintiff alleges that SESAC excludes competitors by obtaining a critical mass of must-have works, selling them exclusively in the blanket license format, discouraging direct licensing by refusing to offer carve-out rights and obscuring the works in its repertory.”  The court found the RMLC had “sufficiently pleaded that SESAC’s lack of transparency exacerbates the exclusionary nature of its conduct by forcing radio stations to purchase the SESAC license even if they do not plan to perform the songs in SESAC’s repertory for fear that they may unwittingly air copyrighted content.”  Looks like this claim is going to be decided by a jury…

The order is below:

 

RMLC v SESAC Antitrust Decision