The $150 million lawsuit against Spotify, the largest in the company’s history, is making waves across the music industry. Competitors like Pandora and Rhapsody are reevaluating their own practices, fearful of facing similar suits. Leading the charge is songwriter David Lowery, lead singer and guitarist of bands Cracker and Camper Van Beethoven, who on December 28, 2015, filed the class action lawsuit in the Central District Court of California. The complaint alleges that Spotify has unlawfully distributed copyrighted music compositions to more than 75 million users, but failed to identify or locate the owners of those compositions for payment, and did not issue a notice of intent to employ a compulsory license. Specifically, Lowery, who has retained Sanford Michelman and his law firm, Michelman & Robinson, LLP, claims that Spotify has violated his mechanical rights, the ability of a copyright holder to control his or her ability to reproduce a musical work.
The complaint notes that statutory penalties allow for judgments between $750-30,000 for each infringed work, and up to $150,000 per song for willful infringement. Some sources indicate that Spotify created a reserve fund between $17 million and $25 million in order to pay royalties for pending and unmatched song use. “There is a major problem with Spotify’s business model,” said Sanford Michelman. “You need to get a songwriter’s permission before you can use his or her work, pursuant to statute. They are doing the inverse, essentially saying that they’ll take artists’ works without asking permission or following any kind of procedure.”
Clearly, Michelman & Robinson is protecting the rights of artists: this is not the Firm’s first foray in navigating unchartered copyright waters. In May of last year, the Firm prevailed in California’s Ninth Circuit on behalf of Rightscorp and its clients Warner Bros. & BMG Rights Management, arguing the company had properly sought subpoenas to identify potential copyright infringers for purposes of pursuing its rights under the Digital Millennium Copyright Act. Successfully invoking California’s anti-SLAPP statute, Michelman persuaded the court to strike class action accusations of abusive enforcement tactics. Rightscorp assists studios and other entertainment companies in enforcing their copyrights.