Spotify Claims Kobalt Is at Fault in Eminem Songs Copyright Dispute

Spotify has filed a third party claim in a federal court in Tennessee against Kobalt Music Publishing, alleging that the company is at fault in a copyright dispute over 243 Eminem songs, including the Grammy- and Oscar-winning "Lose Yourself."

The filing stems from a lawsuit initiated in August 2019 by Eight Mile Style, the publisher of the Eminem songs in question, against Spotify, which alleged the streaming service was engaging in willful copyright infringement by hosting these hundreds of songs on its platform. The suit, which also targeted the Music Modernization Act, claimed that Spotify did not have a license to reproduce the songs and had "not accounted to Eight Mile or paid Eight Mile for these streams but instead remitted random payments of some sort, which only purport to account for a fraction of those streams."

In Spotify’s filing late Friday (May 29), the streaming service places the fault on Kobalt, which has an administration deal with Eight Mile Style (with which Eminem is not affiliated) to license and account for the publisher’s songs. Spotify says Kobalt led the streaming service to believe that Eight Mile Style’s songs were included in the direct licensing agreement between the two companies and that it has been paying royalties to Kobalt for the past nine years on streams of those songs, which it believed Kobalt was in turn paying to Eight Mile Style. Additionally, Spotify says the terms of its licensing agreement with Kobalt indemnifies the streamer against third party claims of infringement.

Effectively, Spotify argues that if it is found to have infringed on the works by not having the proper license, then it is Kobalt that is at fault for leading the streamer to believe it did have such licenses in place through "overt, as well as implied, representations about its administration of Eight Mile’s catalog of music." It also says Kobalt "never sought to exclude" any compositions from its catalog from the service, including the songs in question. (Eminem is not a party in this dispute.)

Eight Mile Style says that its administration deal with Kobalt allows Kobalt to accept and remit royalties on licenses that it explicitly agrees to, but that it does not allow Kobalt to enter into agreements on its behalf and did not consent to its music being licensed to Spotify. Yet Kobalt continued to accept royalties for streams of these songs, Friday's complaint says, and refused to indemnify Spotify after the initial lawsuit was filed by Eight Mile Style last year.

Spotify is suing Kobalt for breach of contract, contractual indemnity, anticipatory repudiation of such indemnity, given its previous stance, and negligent and/or intentional misrepresentation that Spotify had the right to reproduce those songs. It’s asking the court to order Kobalt to pay its court fees and cover any judgment that may arise from Eight Mile Style’s initial claim.

A rep for Kobalt told Billboard in a statement: "On initial review of the Third Party Complaint, Spotify mischaracterizes the substance both of the services Kobalt provides to Eight Mile Style and Martin Affiliated in the United States, as well as the content of Spotify’s direct US licensing agreement with Kobalt. Kobalt has not breached its agreement with Spotify, and will vigorously defend against these baseless allegations.”