Last month, Kobalt was dragged into a legal dispute between Spotify and Eight Mile Style, an independent publisher of Eminem songs.
Spotify launched its legal action against the publisher and Kobalt, after Eight Mile Style – with whom Eminem is not actively affiliated – sued Spotify in the US last year, alleging that Spotify lacked licenses for nearly 250 Eminem songs it represents, including hits like Lose Yourself.
Spotify suggested in its claim that, “although the underlying infringement claim by Eight Mile lacks merit, it is Kobalt that bears ultimate responsibility should Eight Mile prevail”.
Now Eight Mile Style has just filed suit again, and this time the publisher is aiming a number of serious allegations at Spotify and US-based mechanical rights organization, Harry Fox Agency (HFA).
At the centre of the case, Eight Mile accuses HFA of “a joint conspiracy with Spotify to distribute fraudulent documents and misrepresentations designed to conceal and enable Spotify’s infringement of the Eight Mile Compositions”.
The attorney representing Eight Mile Style is Nashville-based Richard S. Busch, a partner at King & Ballow Entertainment Law, who has worked on a number of high profile copyright infringement cases over the past couple of years.
The new claim, obtained by MBW and which you can read in full here, was filed in a Nashville court yesterday (July 1) and suggests that Spotify and HFA’s alleged “scheme to engage in copyright infringement was a massive success”.
The filing suggests that Kobalt “was tricked into believing that Spotify had compulsory licenses and into accepting ‘royalty statements’ distributed by HFA on behalf of Spotify” and “was further tricked into believing that Eight Mile was being accounted to properly”.
“Spotify, through it and HFA’s fraudulent contributions, has built a multi-billion dollar business with no assets other than the recordings of songs by songwriters like Eminem made available to stream on demand to consumers on its digital platform.”
Eight Mile Style
Eight Mile Style argues that Spotify did not have any mechanical licenses, “direct, affiliate, implied, or compulsory, to reproduce or distribute” the 243 songs Eminem songs published by Eight Mile style.
It claims that HFA “acted deceptively by, in concert with Spotify, circulating backdated NOI’s purporting to constitute valid and timely compulsory mechanical licenses and pretending to have mechanical licenses through the issuance of fabricated mechanical ‘royalty statements’.”
Continues the filing: “Defendants engaged in their fraudulent scheme in a joint effort to:
“(1) conceal Spotify’s failure to acquire timely compulsory mechanical licenses for the Eight Mile Compositions,
“(2) deceive Kobalt and Eight Mile into accepting “royalties” that were based on statutory rates established for timely and valid compulsory licenses; rates that were much lower than the amounts that Eight Mile could have otherwise negotiated because of Spotify’s failure to timely and properly obtain compulsory licenses,
“(3) deceive Kobalt and Eight Mile into accepting “royalties” that were based on false usage information, and
“(4) avoid the need for Spotify to negotiate and contract with Eight Mile for the more expensive direct voluntary mechanical licensing agreement while still reproducing and distributing the iconic Eight Mile Compositions, which were essential for Spotify to have on its platform to be competitive after launching its service and in the run up to Spotify’s initial public offering.”
Eight Mile Style’s filing goes on to suggest that “Spotify would have gained the financial benefit of tens of millions of Eminem fans” subscribing to the service.
“These subscribers and the market share they brought to Spotify has also been realized by Spotify not only in its multiple fundraising activities exceeding $2.5 billion and pre-public offering valuations, but also in its direct listing in the stock market that now has Spotify’s market cap at approximately $44.96 billion,” it adds.
“This windfall has made its way into the pockets of Spotify’s equity holders who not only were aware they were unlicensed but chose to operate unlicensed in a rush to get their company to a financial exit.
“Notably, music publishers like Eight Mile, and songwriters like Eminem, whose songs were critical to Spotify attracting the users that increased Spotify’s value, were excluded from sharing in these billions of dollars.
“Spotify, through it and HFA’s fraudulent contributions, has built a multi-billion dollar business with no assets other than the recordings of songs by songwriters like Eminem made available to stream on demand to consumers on its digital platform.”
Last month Richard Busch represented songwriters suing Travis Scott for alleged copyright infringement on his US No.1 single, Highest in the Room.
In 2018, Busch represented the Marvin Gaye Estate in its successful copyright infringement case against the co-creators of Blurred Lines, Pharrell Williams and Robin Thicke – which ultimately led to an award of almost $5 million.
Also in 2018, Busch represented Irish band The Script as they sued British pop star James Arthur, again for alleged copyright infringement, this time for Arthur’s worldwide hit, Say You Won’t Let Go.
In October pop-punk band Yellowcard filed a lawsuit, via Busch, claiming that Juice Wrld’s smash Lucid Dreams had infringed on the copyright of the melody in their song, Holly Wood Died.
The statutory damages initially sought by Eight Mile Style against Spotify works out to $150,000 for each of the 243 songs, or $36.45 million in total.
In Spotify’s subsequent complaint, filed at the end of May, the streaming company argued that Kobalt was actually responsible for the purported infringement, because it granted licenses to the streaming platform for songs “allegedly owned by Eight Mile” for a number of years.Music Business Worldwide
