Spotify sued for over $1.6bn in flotation lead up

The music streaming service Spotify has been sued by Wixen, A Californian company that collects royalties for musicians, alleging that Spotify doesn’t have the full rights to many of the songs it has been hosting. Wixen, which represents artists such as Tom Petty, Janis Joplin, the Doors and Neil Young claims that Spotify took shortcuts when agreeing deals with record labels to host their back catalogues which did not give them the full rights to host the songs.

The case states that under the US Copyright Act each song has two copyright claims, one to the recording and one to the composition, and it is the latter rights to the composition that Wixen alleges were never granted to Spotify. The claim seeks damages of $150,000 per song.

Spotify has faced many legal challenges in the past relating to the copyright of the songs it hosts, most recently agreeing to pay over $20m in 2016 to settle a case with the National Music Publishers’ Association, and in 2017 agreeing to pay over $40m to settle a case with three independent publishers.

The timing of this larger-than-usual claim against Spotify is not ideal for the company which has reportedly filed documents for an Initial Public Offering (IPO) last month and is expected to list on the NYSE this year. The largest music streaming service in the market, Spotify has over 60m paying subscribers and is reportedly valued at more than $18bn.

For any aspect of Intellectual Property advice and overall strategy, please get in touch with the ip21 team.

Richard Jones, Business Relationship Manager for ip21 Ltd.