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I'd want to check out the details of the rights to 'cover' a song under copyright before dismissing BlueBeat's claims as preposterous-but until I do that personally (which will probably be never, unless I really get interested) I'll assume that the judge did so before setting aside the argument.
Basically, if copyright law allows a musician to produce a new version of a song simply by paying a licensing fee, called 'covering' a song, and the copyright to the cover is then owned by the new musician, then it sounds like BlueBeat might be in compliance (assuming they did pay the required licensing fees). OTOH if copyright law requires negotiating to establish the license fee (and no rights to cover the song if negotiations aren't successful), then BlueBeat undoubtedly wasn't in compliance.
And the final question involves how different the cover must be before it's eligible for a new copyright, licensing fee or not.
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