Spotify Wants Appeals Court to Decide Who in Music Can Sue for Copyright Infringement

Spotify CEO Daniel Ek - H - 2018

Before Congress passed the Music Modernization Act two months ago, Spotify was hit with several lawsuits that alleged the streamer hadn't adequately obtained mechanical licenses for song compositions. The litigation that potentially put Spotify on the hook for billions of dollars in damages may have helped bring about critical support from the tech industry for the new law because while the U.S. Copyright Act provides a compulsory license to allow anyone to make a mechanical reproduction of a song, those who wish to do so must follow certain protocol such as sending out notices and making payments. Identifying and locating co-authors of tens of millions of copyrighted musical works proved daunting.

The Music Modernization Act alleviated the situation for users of music by establishing a new mechanical licensing collective charged with maintaining a database of musical works and sound recordings, but Spotify and music publishers won't be singing "Kumbaya" together anytime soon.

Many of those lawsuits that predated the new legislation are still being fought, and in one case, Spotify has just made a move that challenges who exactly can sue for copyright infringement.

The lawsuit comes from Bluewater Music Services, which is in court alleging willful infringement of more than 1,300 compositions including Player's "Baby Come Back," Miranda Lambert's "White Liar" and Guns N' Roses' "Yesterdays." Each carries statutory damages up to $150,000.

In response, Spotify looked to the agreements by which Bluewater was able to administer rights on these songs. The agreements gave Bluewater "exclusive rights," but added that Bluewater “may not execute any mechanical licenses with the exception of full statutory rate without prior written consent."

Spotify argued that it fell short of the exclusive rights necessary to have standing to sue.

In September, U.S. District Court Judge Jon McCalla rejected the dismissal motion.

"Spotify argues that because Plaintiffs would need consent to authorize mechanical reproductions at a rate below the statutory rate they do not have an exclusive license," wrote the judge. "Defendant does not direct this Court to any case law to support that argument."

On Thursday, Spotify submitted a motion for an interlocutory appeal, meaning one that would take place before a trial (which here is scheduled for April 2020).

Spotify hopes to take to the Sixth Circuit Court of Appeals the question, "If Plaintiffs need the consent of their publisher- clients to authorize mechanical reproductions at a rate below the statutory rate, and if anyone can obtain a mechanical license at the statutory rate without Plaintiffs’ consent by issuing a Notice of Intention ('NOI'), can Plaintiffs be said to have an exclusive right to license with respect to mechanicals and thus have standing?"

Here's the full motion that essentially challenges whether administrators and publishers in the music business have insufficient authority in their agreements with clients to act as copyright agents — at least for the purposes of litigation.