License to Stream: Wixen v. Spotify

The same week that Spotify, the world’s biggest streaming service, went public on the New York Stock Exchange, it was sued by Wixen Music Publishing for copyright infringement in the United States District Court for the Central District of California. Wixen, a California based licensing company, handles copyright management and royalty compliance. They represent the works of over 2,000 artists including Neil Young, the Beach Boys, Tom Petty, Weezer, The Doors, Stevie Nicks, Rage Against the Machine, Missy Elliot, Steely Dan, the Black Keys, and Janis Joplin, amongst others.

The lawsuit alleges that Spotify blatantly disregards copyright law and uses thousands of songs without a proper license to stream – a mechanical license. There are two separate copyrights for every recorded song:

  • A copyright for the sound recording (the song’s words)
  • A copyright for the musical composition (the musical notation)

The copyright for the musical composition is known as a mechanical license. This distinction is important because a license for a sound recording generates revenue for the owner of the sound recording, typically the artist’s record label. In contrast, the license to reproduce and distribute the musical composition generates revenue for the composition owner, usually the songwriter and their music publisher.

A mechanical license can either be a direct mechanical license or a compulsory mechanical license. The terms refer to how the license is obtained.

  • A direct mechanical license is obtained by directly negotiating the license.
  • A compulsory mechanical license means that a notice of intent to use a musical composition was sent to the copyright owner.

Failure to timely serve a notice of intent forecloses the possibility of a compulsory license. Without either a direct or compulsory mechanical license, streaming a musical work, even with a license to stream a sound recording, constitutes copyright infringement.

This is the crux of Wixen’s Spotify lawsuit. Wixen claims that Spotify obtained the rights to the sound recordings, but failed to obtain the equivalent rights for the musical compositions. The complaint alleges that Spotify outsourced the responsibility to obtain the mechanical licenses to the Harry Fox Agency, and that the Harry Fox Agency was “ill-equipped to obtain all the necessary mechanical licenses.”

Wixen is seeking damages of $150,000 per song – the maximum award possible under the U.S. Copyright Act for at least a total of $1.6 billion, and injunctive relief.

Are you a singer?  Have you offered your original works on the internet on sites such as Facebook or Youtube? Has your copyright been infringed? Our internet attorneys at Hutcherson Law understand the nuances of copyright law. We can investigate copyright infringement and help you recover the relief that you rightly deserve. Contact our internet attorneys at Hutcherson Law today if you believe that someone has infringed on your copyright.