Spotify Settles Two Costly Lawsuits Which Totaled Over $346 Million

In July 2017, prior to the enactment of the Music Modernization Act (MMA), Bluewater Services and songwriter Bob Gaudio filed massive copyright lawsuits against Spotify.

Both cases dealt with a tricky part in music copyright – the mechanical license.

In a massive $365 million copyright infringement lawsuit, Bluewater Music Services Corporation alleged that Spotify willfully infringed on 2,339 copyrighted works.  These include Sam Gay’s ‘10,000 Pieces’ and Bob Morrison’s ‘You’d Make An Angel Want To Cheat.’

Bluewater had reportedly terminated the company’s license to reproduce and stream the works in November of 2016.

Bob Gaudio from Frankie Valli and the Four Seasons filed a similar lawsuit.

In short, Spotify streamed their songs without permission.

After checking streamed works dating back to April 2015, Bluewater realized that Spotify hadn’t paid any mechanical royalties.  In fact, the streaming giant hadn’t negotiated a direct mechanical license.

Powerhouse attorney Richard Busch represented Gaudio and Bluewater.

According to Spotify, however, the mechanical publishing license doesn’t apply to the music streaming company (again, this was before the Music Modernization Act codified the streaming mechanical into law).

Spotify’s lawyers wrote,

“‘Streaming’ – by its very definition – cannot infringe upon either the reproduction right under 17 U.S.C. § 106(1) or the distribution right under 17 U.S.C. § 106(3).

The company further defended itself, stating that it didn’t have data to track the compositions or sound recordings.  These included tens of millions of copyrighted works on its platform.

A judge didn’t buy Spotify’s argument.  Last October, a federal court in Tennessee tossed the company’s bid to dismiss both lawsuits.

Now, to avoid paying millions in damages, the streaming music giant has given in.

Spotify finally pays up.

Late last year, the music streaming company settled a year-long $1.6 billion lawsuit with Wixen Music Publishing.

Like Gaudio and Bluewater, Wixen alleged that Spotify had used tens of thousands of its songs without permission or proper royalty payouts – for years.  Under terms of the undisclosed settlement, both sides reached a “fair and reasonable” deal.

In Tennessee, Spotify has agreed to a joint motion filed to postpone further discovery.  As with Wixen, terms of the deal remain undisclosed.

The move comes ahead of a House of Judiciary Committee hearing investigating copyright laws.  Topics will include unmatched royalties unpaid by Spotify and Apple Music, among other streaming services.