Spotify's Motion Denied In Legal Tussle Over Mechanical Rights Payments

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In an important copyright lawsuit from a music publisher that Spotify faces over mechanical rights, a judge just denied a motion from the streaming company that suggested it doesn’t need to license those rights in the first place. Although the denial of the “motion for a more definite statement” means the case can proceed without a revised complaint from the plaintiffs, it does not prevent the company’s attorneys from continuing to make that argument.

In July, Spotify was sued by Robert Gaudio, a songwriter and founding member of Frankie Valli and The Four Seasons, and Bluewater Music Services Corporation, which administers publishing rights for songwriters. The companies allege that Spotify infringed their copyrights by streaming compositions for which it hadn’t licensed “mechanical rights.”

In response, Spotify filed a motion in the Gaudio case for a more definite statement, arguing that the publishers complaints do “not set forth a cogent theory of infringement” because it has no obligation to license mechanical rights in the first place, although the company and other on-demand streaming services have always done so.

On Wednesday, the lawyer for the publishers, Richard Busch, who represented Marvin Gaye’s family in the “Blurred Lines” case, filed a response, as well as a third lawsuit. The cases are important for the entire music business: A loss for Spotify could hurt the company as it prepares for a public stock offering, while a win on these grounds could shake the music publishing business.

In an abstract case, which could hinge on the difference between a public performance and a distribution, the order denying Spotify’s motion is something of a sick burn: It says both sets of pleadings are too long, and that “one can state the time of day without giving the history of their watch.” But it does not rule on the merits of Spotify’s argument, and it points out that the company can file a motion to dismiss the case.

If Spotify continues to argue that it has no obligation to license mechanical royalties, the National Music Publishers Association (NMPA) may intervene, says president and chief executive David Israelite, presumably with an amicus brief. “I’ll be shocked if they try to raise that argument again,” Israelite says, “because they’ll be at war with the industry.”