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Spotify facing $1.6 billion copyright lawsuit

The Swedish music streaming company Spotify has been blasted with a $1.6 billion dollar copyright lawsuit for allegedly using thousands of songs without a license and failing to pay compensation to the music publisher.

This is not the first time the music mogul has faced legal trouble. Last spring, Spotify was involved in a large class action lawsuit for $43 million dollars for failing to pay royalties on the songs it makes available to users.

A fight for the rights

The suit was brought forth by Wixen Music Publishing Inc. Wixen claims that Spotify failed to get a direct or compulsory mechanical license from Wixen that would allow it to offer songs for streaming and downloading. Artists whose music was part of the suit include Tom Petty, Neil Young, the Doors, Stevie Nicks and Weezer. Wixen contends that Spotify outsourced the handling of licensing and royalties to a third party who was ill equipped to manage the task. The outsourced company, the Harry Fox Agency, handles most mechanical royalties in the U.S.

Each country has its own group that handles mechanicals and to collect royalties internationally, an artist must be registered with the group that handles mechanicals for each country. Mechanical royalties are paid by whoever obtains the license to reproduce and distribute a piece of music. Depending on how many songwriters contributed to a song, it can have multiple mechanical licenses.

The mechanics of a mechanical license

In copyrights of musical recordings there are two types of copyrights. The first is for the composition, such as the sheet music. This is referred to as the musical work. The second type of copyright is for the sound recording, often called a phonorecord. The phonorecord is any type of medium for storing a sound recording such as vinyl records, CDs and MP3s.

A mechanical license, when granted by the copyright holder, gives another party permission to cover, reproduce, distribute or sample specific parts of the original composition. However, a mechanical license does not give permission to sample from the phonorecord of the original recording.

For example, if an artist wished to sample the guitar riff from another artist’s song they could contact the copyright holder and get a mechanical license. After securing the mechanicals, they could either record the guitar riff themselves or hire someone to perform it and record their performance. However, they could not simply copy the guitar riff off of the CD.

To be paid mechanical royalties, songwriters must be registered with a collection agency that handles the mechanicals. The process can be tedious, but in the end it is worth it to ensure you are fairly compensated for your original works. If your work has been subject to copyright infringement you have legal options available. An intellectual property attorney can help you pursue your claim.