This is The Legal Beat, a weekly music law newsletter from Billboard Pro, bringing you a one-stop cheat sheet of big new cases, landmark decisions and all the fun stuff in between.
This week: Spotify is facing a lawsuit over claims it “illegally” chose to cut royalty payments to publishers and songwriters. Earth, Wind & Fire reach a settlement over how much they're owed in damages from an unauthorized tribute band. Elvis Presley's granddaughter sues to protect Graceland from 'fraudulent' foreclosure. and many more.
THE BIG STORY: Spotify taken to court over copyright
Weeks later Advertising sign estimated Spotify would pay songwriters and publishers about $150 million less next year, the streaming giant is facing a legal battle over the move.
In a lawsuit filed last week, the Mechanical Licensing Collective (MLC) alleged that Spotify had “unilaterally and unlawfully” chosen to almost halve its royalty payments by “misrepresenting” the nature of its streaming services to secure a lower rate .
“The financial consequences of Spotify's failure to meet its legal obligations are enormous for songwriters and music publishers,” MLC wrote. “If left unchecked, the impact on songwriters and music publishers of Spotify's illegal underreporting could run into the hundreds of millions of dollars.”
At issue in the lawsuit is Spotify's recent addition of audiobooks to its premium subscription service. The streamer believes that because of the new offer, it is now entitled to pay a reduced “package” royalty rate under federal law. However, the MLC says Spotify's interpretation is legally incorrect and represents a “clear breach” of its requirements under the law.
This is the second lawsuit in six months for MLC — an entity created by Congress in 2018 to collect royalties under the Music Modernization Act. After the MLC filed a similar case against Pandora in February, that streamer argued that the group was supposed to act as a “neutral intermediary” and was “not authorized to play judge and jury” or pursue “legal shenanigans.”
For the full breakdown of the new case against Spotify — including industry reactions and access to the full complaint filed in court — read Kristin Robinson's article full story here.
Other top stories this week…
TRADEMARK TEST AVOIDED – Earth, Wind & Fire they reached a settlement with a tribute act that used the R&B group's name without permission, avoiding an impending lawsuit over the amount the unauthorized group would have to pay in damages. The settlement came months after a federal judge ruled that the tribute — “Earth, Wind & Fire Legacy Reunion” — infringed on the band's trademarks.
LIVE NATION CASE EXPLANATION – With an antitrust lawsuit against Live Nation by the US Department of Justice expected soon, Advertising signby Dave Brooks dove deep — Breaking down the details of the looming case, explaining how it could affect Live Nation and recounting recent federal efforts to crack down on anticompetitive practices at tech giants like Google and Apple.
FIELD ROCK – Elvis Presley's granddaughter, Riley Keough filed a lawsuit aiming to block a “fraudulent” foreclosure sale of the late singer's historic Memphis home, Graceland. Keough's lawyers say the sale was blocked by false claims that her late mother, Lisa Marie Presley, borrowed $3.8 million and used Elvis' famous mansion as collateral.
UMG DROPPED FROM THE DIDDY CASE – Universal Music Group (UMG) and CEO Lucian Grainge it was dismissed from suit claiming they “aided and abetted” Sean “Diddy” Combs in his alleged sexual abuse – a move that came after the lawyer who filed the case admitted there was “no legal basis for the allegations”. The sudden reversal came as UMG's lawyers argued that the allegations were so “outrageously false” that they planned to take the unusual step of seeking legal action directly against the accuser's lawyer.
MODEL SETTLEMENT – Kanye West they reached a settlement with Donna Summer's estate to settle a copyright lawsuit accusing him of “shamelessly” using her 1977 hit “I Feel Love” without permission in his song “Good (Don't Die).” The lawsuit, filed in February, alleged that West “arrogantly and unilaterally” used her music, even though she had expressly denied him permission.
NAME GAMES – Members of 1980s New wave band The Plimsouls won legal decision against the band's guitarist over the trademark rights to the band's name. The case was the latest music industry battle over the names of classic rock bands including Journey, Stone Temple Pilots, Jefferson Starship, The Rascals, The Ebonys, The Commodores and The Platters.
