Spotify Facing $1.6B Copyright Lawsuit Over Tom Petty, Neil Young Songs

Spotify has been slapped with a copyright lawsuit by Wixen Music Publishing for damages worth at least $1.6 billion, according to The Hollywood Reporter. Although Spotify is not new to such lawsuits, the damages this time could prove costly for the music service.

Copyright Lawsuit
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What the lawsuit says

According to the lawsuit filed by Wixen, Spotify is using tens of thousands of songs without a proper license and the compensation. Wixen Music manages the song composition rights for artists such as Neil Young, Tom Petty, Zach De la Rocha among others.

In the lawsuit, Wixen says, “Prior to launch, Spotify struck deals with major record labels to obtain the necessary rights to the sound recording copyrights in the songs by offering the major labels, in many cases, equity stake in Spotify.”

However, the company could not obtain the equivalent rights for the compositions, the lawsuit states.

“As a result, Spotify has built a billion dollar business on the backs of songwriters and publishers whose music Spotify is using, in many cases without obtaining and paying for the necessary licenses,” Wixen says.

The latest copyright lawsuit follows the earlier proposed $43 million settlement related to music rights holders and Spotify in a class-action lawsuit, Ferrick v Spotify, in May of last year. However, Wixen claims that the lawsuit does not “adequately compensate” Wixen or the songwriters represented by the company, notes TechCrunch.

“The Settlement Agreement is procedurally and substantively unfair to Settlement Class Members because it prevents meaningful participation by rights holders and offers them an unfair dollar amount in light of Spotify’s ongoing, willful copyright infringement of their works,” Wixen said.

Back then, Spotify did confess that it failed to obtain the required statutory licenses to reproduce and/or distribute musical compositions on its platforms. However, Spotify has been debating if Wixen was really authorized by its clients such as Andrew Bird, Kenny Rogers and so on to take such extreme steps. Although songwriters have entered into administrative agreements with Wixen allowing it to negotiate the licensing deal, Spotify states that there is no word in the agreement over the litigation, according to The Hollywood Reporter.

Copyright lawsuits – nothing new for Spotify

In July, Spotify was knocked with two more lawsuits, including one from the songwriter and founding member of the group Frankie Valli, Bob Gaudio and the Four Seasons. The allegations were similar to that of the Ferrick lawsuit, accusing Spotify of not complying with section 115 of the United States Copyright Act. This act offers a compulsory license to make a mechanical reproduction of a musical composition, given the “notice of intention” is sent out and payments are made.

Moving forward, there are chances that such copyright lawsuits may lose their importance. The upcoming Music Modernization Act, a bipartisan House of Representatives bill would make licensing simple by putting songs in a public database, and offer the companies blanket mechanical song licenses tied to the market worth. This way Spotify and other similar services will have to deal with only one entity. If the bill sails through, it will clear licensing actions taken before 2018 unless the lawsuit was already in progress, notes Engadget. Wixen accepts the bill, but said it has no option but to sue Spotify to get the licensing revenue.