Trump Administration Staying Out of Challenge to Music Licensing Law for Now

Justice Department lawyers address possible intervention down the road in a lawsuit from an Eminem publisher against Spotify.
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The United States Department of Justice has filed court papers acknowledging that Eminem publisher Eight Mile Style is challenging the constitutionality of the Music Modernization Act in a big copyright lawsuit against Spotify. However, citing the early posture of the case, the Trump Administration told a Tennessee federal court Wednesday night that it won't yet intervene to directly defend the music licensing law.

Enacted at the beginning of 2018, the Music Modernization Act is one of the few legislative accomplishments during the Donald Trump years as well as a breakthrough compromise between the music and tech communities.

Streamers like Spotify have long complained that it is hard to take advantage of compulsory licenses for the mechanical reproduction of song compositions when the many co-authors and co-owners of such tunes can be tough to identify. Meanwhile, songwriters and publishers have long felt they aren't getting their proper due as digital distribution becomes more of norm. The new law was meant to alleviate the difficulty of "matching" songs with their owners through a database run by a Mechanical Licensing Collective, which will grant blanket licenses beginning in 2021. The statute also provided a bit of a liability shield for digital music providers not sued by composition owners by Dec. 31, 2017.

In a lawsuit filed in August, Eight Mile alleged that Spotify was willfully infringing "Lose Yourself" and about 250 of the rapper's other songs on its service. The complaint further charged Spotify with not living up to its obligations under the MMA by not making "commercially reasonable efforts" to match sound recordings. And as for the constitutionality of the Music Modernization Act, Eight Mile contends that retroactively wiping out a copyright holder's ability to recover profits, statutory damages and attorneys fees amounts to "an unconstitutional taking of Eight Mile’s vested property right," an alleged violation of the Takings Clause of the Fifth Amendment.

In a filed acknowledgement (read here), attorneys in the DOJ's civil division say that at this point, "the constitutional challenge has only been raised in the Complaint" and it is unaware of any further "motion or other filing that details the basis of" the challenge.

With the possibility of resolution without adjudication of the constitutional challenge (read: settlement), the U.S. government signals it prefers to wait until the parties make a motion in the litigation directly asking the judge to rule on the law. If that should happen, DOJ attorneys are asking the judge to give them notice and 60 days to intervene.

Spotify hasn't yet answered the primary accusation that it has been using Eminem's songs without fully accounting for streams. But the company has told the judge that it intends to challenge the Nashville federal court's exercise of jurisdiction over the matter. In response, Eight Mile's attorney has accused Spotify of attempting to avoid judges in "Music City" who have made rulings against Spotify in previous copyright suits.