American Society of Composers, Authors and Publishers (“ASCAP”) is a performing rights organization. ASCAP represents almost 50% of U.S. composers and music publishers in licensing and distributing royalties for the non-dramatic public performances of the composers’ and publishers’ copyrighted works. Due to its power in the performance-rights market, ASCAP operates under a judicially administered consent decree.
Some ASCAP members became concerned that new media companies, such as Pandora, were paying below-market rates for public performance licenses. These ASCAP members forced ASCAP to modify its rules to permit the members to withdraw ASCAP’s right to license their works to new media companies, while retaining ASCAP’s right to license their works to other media companies. These ASCAP members then directly licensed their works to the new media companies. Pandora filed a lawsuit challenging ASCAP’s new partial withdrawal practice.
The Second Circuit Court of Appeals addressed the question of whether, under the ASCAP consent decree, publishers may withdraw from ASCAP their rights to license their works to certain new media music users (including Pandora) while continuing to license the same works to ASCAP for licensing to other users.