Spotify Spotted for Alleged Copyright Infringement with a $150M Lawsuit

Posted by Kaustubh Nadkarni on January 18, 2016

Spotify is a digital music service that provides users access to millions of songs via its expansive music streaming service. Recently, Spotify was sued by an independent rock musician David Lowery, a lead singer for Cracker and Camper Van Beethoven. The Complaint is lobbed by a $150M putative class action, alleging that the company has infringed on copyrights of artists by failing to acquire proper mechanical licensing for certain songs that it streams to millions of its users.

What services does Spotify offer?

Spotify was launched in 2008. Since its advent in the music streaming industry, Spotify has completely altered the landscape of how people listen and enjoy their music. In particular, Spotify does not require any downloads to the user’s local device. Rather, licensed users of Spotify can play music directly from its cloud.

Spotify became madly trendy providing the entrenched music industry players like Apple’s iTunes a significant run for its dollars.  For instance, its music streaming service features more than thirty (30) million tracks. Furthermore, besides having the comprehensive portfolio of music to choose from, Spotify’s users can also access to some extraordinary tracks of legendary artists and bands such as The Beatles.

What is Mechanical Licensing within Copyright Law?

A mechanical license grants the rights to reproduce and distribute copyrighted musical compositions (songs) on various tangible mediums such as CDs, records, tapes, ringtones, permanent digital downloads, interactive streams and other digital configurations, including bundled music offerings such as Spotify.

However, a mechanical license does NOT include the following: the right to reproduce song recordings, also known as “master use rights,” the song in a video, performing the song in public, displaying or re-printing of the song lyrics, using the song in digital jukeboxes, background music or ring backs, printing sheet music, and using the song or lyrics on a karaoke interface.

What does the Complaint comprise of?

Lowery filed a complaint alleging copyright infringement against Spotify for not acquiring appropriate mechanical licenses for songs. Specifically, the Complaint seeks claims of direct copyright infringement and unfair business practices. In the complaint, Lowery has stated,

“Spotify has and continues to unlawfully reproduce and/or distribute copyrighted musical compositions to more than 75 million users via its music streaming service, as well as its offline listening music.”

Additionally, Lowery has alleged in the complaint,

“Spotify reproduces and/or distributes the works despite its failure to identify and/or locate the owners of those compositions for payment or to provide them with notice of Spotify intent to reproduce and/or distribute the works.”

What are potential damages plead in the Complaint?

Lowery has plead for statutory damages in the Complaint. In particular, statutory damages in copyright infringement claims include awards from a minimum of $750 to a maximum of $30,000 for each infringed work. If the copyright infringement is willful and can be proved as such, the award damages can be up to $150,000.

Topics: Intellectual property, copyright infringement, copyrights, Intellectual Property Law, IP Licensing, Mechanical License, Statutory damages