Ministry of Sound, a London dance music label, has filed a suit in the U.K. accusing Spotify of copyright infringement, in a case that could have broad implications for music streaming start-ups worldwide.
Ministry of Sound filed the suit Monday in the U.K. High Court, alleging Spotify has not removed certain user playlists that feature the same songs, in similar arrangements, as some of its albums. According to The Guardian, the label's CEO Lohan Presencer has asked Spotify to remove the playlists since 2012, but to no avail. Now Presencer is seeking an unspecified amount of damages, plus an injunction to remove the playlists in question, while demanding that Spotify block any such playlists going forward.
Spotify CEO Daniel Ek said in a statement that his company has paid for its right to stream the tracks, however, the label claims the song order on the playlists are protected by copyright.
The UK's Copyright, Designs and Patents Act 1988 (amended in 1997 to include the European Database Directive) is a little confusing, although it does cover compilations, which are referred to as "databases." These are defined as "a collection of independent works, data or other materials which are arranged in a systematic or methodical way, and are individually accessible by electronic or other means." A separate sui generis database right further explains that a compilation can be protected under copyright if it "shows that there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the contents."
In America, compilations are explicitly protected thusly under the Copyright Act: "collection and assembling of preexisting materials or of data that are selected in such a way that the resulting work as a whole constitutes an original work of authorship."
Ministry of Sound doesn't own most songs on their compilations, so they aren't paid royalties when they're streamed on Spotify. To some skeptics, the claim that their playlists are intellectual property might be seen as a Hail Mary pass to save a fledgling business in a fragmented industry. However, as Presencer told Bloomberg this week, he's only suing the start-up to ensure that his "creativity is protected and respected.”
This isn't the first artist run-in for Spotify, a popular streaming service that hosts 20 million songs, 24 million users, and 1 billion playlists worldwide. Over the summer, Radiohead frontman Thom Yorke and his producer Nigel Godrich pulled several albums, including Yorke's solo effort, The Eraser, and Atoms for Peace's debut--off the platform, describing the company's business model as "an equation that doesn't work."
Recently Ek told Inc. his start-up has paid music rights holders $500 million for licenses, and by the end of 2013, Spotify will pay $1 billion. However, if this lawsuit is upheld, Spotify might cut more royalty checks than it had anticipated.