Case name or Tribunal

Wixen music publishing, Inc sued Spotify for copyright Infringement

Facts:
Wixen music publishing, Inc. is a California based publishing company which was

established by Randall Wixen in 1978. The company is a subsidiary channel for

publishing administration, copyright regulation, and royalty compliance review. Wixen

music is currently subjugating more than 60,000 songs including catalogue of famous

music composers, artists, songwriters and bands. Wixen is a company which has

proved to hold an important role representing and transacting on behalf of many famous

talents and most treasured creators across the globe and ensures its commitment to

provide first-rate service and support to songwriters and music composers. As Wixen is

exclusive licensee of thousands of music works and compositions, it holds exclusive

authorities and rights for signing agreements, collecting royalties and, issuing licenses,

registering copyrights, and otherwise interact and assert rights on behalf of both

publishers and songwriters. On the other hand, Spotify is the world’s largest music

streaming channel with around 207 million active subscribers. The interactive music

streaming channel also allows music downloading via free advertisement (ads) support

as well as paid service. It was started by Daniel Ek and Martin Lorentzon back in the

year 2006. Spotify made their way to US in the year 2011 and today, Spotify accounts

for 36 % of global streaming market and has a market share capital of $28.7 billion

dollars. There are more than 40 million songs streamed on Spotify and is available in

more than 60 countries across the globe. Wixen estimates that their artists and

publishers are found in each one of every five percent songs streamed on Spotify. Also,
Prior to its launch in united states in year 2011 Spotify didn’t obtained all the required

rights to songs and albums and moved forwarded without proper licenses. In addition to

it in 2014, before the United States copyright office Spotify acknowledged that proper

licenses are required “To operate the Spotify Service, Spotify needs to secure multiple

rights from multiple copyright owners. These rights include, among others, the right to

reproduce sound recordings and the musical works embodied therein, the right to

distribute sound recordings and them musical works embodied therein and the right to

publicly perform sound recordings and the musical works embodied therein by means of

digital audio transmissions.” (https://www.copyright.gov/policy/musiclicensingstudy).

Issues:
Spotify is a Swedish audio streaming service; they had been found illegally streaming,

the songs of Wixen publishing company, without proper rights and licenses. Is Spotify

doing something unauthorized? How it has impacted Wixen publishing company?

Should Spotify obtain mechanical and legitimate licenses for playing and streaming

Wixen’s music on its channel?

Rule:
The Wixen Vs Spotify lawsuit was subjected to federal copyright law, it was filed under

28 U.S.C §§ 1331 and 1338. Spotify was held liable for violation section 102, 115 and

505 of copyright act.

Analysis/Application:
In this case Spotify USA Inc. is a Delaware corporation and “Delaware Court System” is

very well-known and considerate “Because corporate issues and uses in Delaware’s

Court are judged instead of juries and so, if a business is involved in litigation, it will be
judged properly with a lot of expertise in complex corporate law matters”

(https://courts.delaware.gov/chancery/). The Spotify which is one of the largest and

popular music streaming channels across the globe was held responsible for

unauthorized web streaming of songs and music compositions of Wixen publusing

company, as Spotify didn’t owned and opt for legitimate rights and proper licenses for it

and failure and omission to opt for appropriate licenses had caused huge loss to Wixen.

As the lawsuit was subjected to federal copyright law, it was filed under 28 U.S.C §§

1331 and 1338.

Spotify was found guilty under the section 102 and 115 of copyright act. Under the

section 102 of the copyright act, no individual or party has a right to reproduce or make

copies of the original composition of music composers and artists, but Spotify

illegitimately copyrighted the songs and compositions of Wixen and reproduced and

distributed the copies without the information of Wixen and also without their prior

permission. As a result, Wixen faced harm and damage for their unauthorized work. The

Wixen also stated that their profit was reduced and so did they claim for the damage of

$150,000 per composition. In total the amount of loss was $1.6 billion. Secondly, the

Spotify streamed the music compositions without any license or terms and conditions

and so, they overruled the section 115 of copyright act and so the Wixen Publsihing

Company, filed another case on Spotify to get attorney’s fee and cost. Wixen filed the

suit under section of 505 of copyright act.

Decision/Aftermath:
The aftermath of this case, concludes that both the parties announced and decided to

settle this matter outside the court. They had ongoing settlement discussions and lastly
Spotify understanding the situation heeded to Wixen concerns and they collaboratively

found win-win resolution to the problem. Spotify was directed to improve the gathering

and collecting of information about composition owners to help ensure those owners are

paid their royalties in the future. after that company launched new songwriter credits

feature which keeps track who deserves credit for the song and launched an analytics

service for music publishers, song writers, composers to track their artists streaming

statistics. It also elevated the system and framework of music licensing platform and

prepared for the challenges that come with tracking rights and specifically mechanical

issues. The industry was impacted by the revision of the music act, which was later

signed into month of October. However, the law also stated that, the royalty disputes

after January 1, 2018, would be handled under the amended law and so, it wouldn’t not

be applicable in Wixen’s Lawsuit.

Business Significance:
Both the parties Wixen and Spotify aim for minting profit in their fields, Wixen being

more rational has all the copyrights and licenses and serve as a major music

composers and song writers, and on the other hand Spotify is know for bringing a boom

in online streaming industry. If Wixen Publishing company, wouldn’t have taken action

of filing a lawsuit against Spotify USA Inc., then Spotify would still continue to perform

the malpractice of streaming songs illegitimately without proper mechanical licences.

Suppose if no lawsuit for filed against Spotify for their malpractice of unauthorized

streaming of songs, then other new emerging company whose concept and base is

similar to that of Spotify would consider it as acceptable to illegitimately stream songs of

music composers, on their channel without proper licenses and rights.

 Comparison:
As indicated by our appraisal on both the cases so far, we found certain similarity

between both the Law suits against the Spotify. Both the lawsuits were associated at

the same point, that Spotify has wilfully and repeatedly reproduced and distributed their

Works over their streaming channel. In first case, there was Violation of Publishers,

composers’ rights for the melodies and in another lawsuit, it was a case of copyright and

mechanical Licensing issue.

Primary concern is that, in both the cases, Spotify was sued for a big amount. First

lawsuit was settled with (NMPA) for 30 million dollars. However, the second time

bunches of individuals were associating with the Melissa Ferrick and opposition was

getting solid against the Spotify, and so, Spotify settled with them, by offering them

same Royalty rate, yet the other parties who abandoned from the sovereignty rate

Spotify will pay them off 43 million dollars. So in this way Spotify secured its integrity.