Spotify at War with Artists over Licensing Mechanical Rights

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Summary: A judge threw out Spotify’s motion to dismiss a copyright lawsuit after the music streamer said that it did not have to license mechanical rights. 

Spotify is engaged in a copyright lawsuit with Robert Gaudio, who claims the music streaming company infringed on his copyright because it didn’t license “mechanical rights.” Spotify asked that the case be dismissed, but this week, a judge denied the motion.

  

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Robert Gaudio is a songwriter and founding member of Frankie Valli and the Four Seasons. He and Bluewater Music Services Corporation sued Spotify in July for copyright infringement.

Spotify had already settled a class-action lawsuit in May for $43 million over songwriter royalties, but many high-profile musicians weren’t satisfied and filed complaints such as the one from Gaudio.

According to Billboard, Gaudio’s case is “important” because of the nature of mechanical rights, which grants the rights to reproduce and distribute copyrighted musical compositions on items such as CDs. Spotify said that they did not have to license mechanical rights because they are a streaming service, not reproducing the music, but the judge disagreed. Although Spotify claims it does not have an obligation to license those rights in the first place, other companies have always done so.

The plaintiffs are represented by Richard Busch, a copyright attorney who successfully represented Marvin Gaye’s estate when they sued Robin Thicke for stealing the tune for “Blurred Lines.” On Wednesday, Busch filed a response to Spotify’s dismissal as well as a third lawsuit.

Billboard said the lawsuit could change the music publishing business. If the music streaming company continues to argue it does not have to pay for mechanical rights, the National Music Publishers Association (NMPA)  has vowed to intervene.

“I’ll be shocked if they try to raise that argument again,” NMPA President David Israelite said to Billboard. “Because they’ll be at war with the industry.”

Fast Company reported that lawsuits following the $43 million settlement have piled up against Spotify. Yesterday, songwriters Tom Petty, Kenny Rogers, Kim Gordon, and David Cassidy challenged the settlement, stating that the amount was “unfair” and did not go far enough.

Fast Company said that the heart of these lawsuits is that Spotify does not pay royalties to songwriters, which the company said is due to lack of metadata on how often the song is streamed.

“Unlike the deals Spotify negotiates directly with record labels and performance rights organizations (PROs) over the rates it pays to stream sound recordings, the rates paid to songwriters for the underlying compositions (mechanical royalties) are determined by U.S. law and can be secured using what’s called a compulsory license–either by negotiating with the publisher directly, or sending a “notice of intent” with the U.S. Copyright office and committing to pay a legally defined licensing fee. The recent lawsuits accuse Spotify of not just failing to secure many of these licenses, but also failing to file these notices of intent,” Fast Company wrote.

Additionally, if Spotify were to lose Gaudio’s case, this could affect their public stock offering which is on course to happen soon.

• Robin Thicke Appeals Blurred Lines Decision  
• Robin Thicke and Pharrell Williams Lose Marvin Gaye Copyright Lawsuit to the Tune of $7.4 Million 

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