Spotify has come out on top in a long running court case in which it was accused of streaming Eminem’s music without his permission.
The complex case dates back to 2019 when the rapper’s publisher Eight Mile Style sued Spotify for $30 million, claiming it had failed to correctly license Eminem’s work, which had by that point been streamed billions of times.
Initially Spotify responded by blaming Kobalt Music, which administers the rights for thousands of songs and collects royalties for artists. It went on to allege Kobalt had misled them into believing they controlled the administration of Eminem’s catalogue when that was not the case.
Spotify also pointed out that in the eight years from 2011 Eight Mile Style had “never once questioned” their rights to stream Eminem tracks and had been accepting royalty payments from them all that time. "Eight Mile’s story defies logic," the company's lawyers insisted.
Lawyers have batted arguments back and forth for over five years and now at last a judge has published her opinion – Spotify are not liable for any damages.
Judge Aleta A Trauger highlighted that although Kobalt was authorised to collect royalties on Eminem – its rights did not cover the US and Canada. It seems that those had been transferred in 2009 to a company called Bridgeport Music, which is affiliated to Eight Mile Style.
Bridgeport "never formally notified any third party that it was taking over" the licensing of Eminem's music, Judge Trauger wrote. She described this as "inexplicable", unless it was a "strategic" attempt to extract money from Spotify by claiming copyright infringement. She also noted that Eight Mile never once sent Spotify a ‘cease and desist’ letter and thus was not the “hapless victim” it was claiming to be.
"Eight Mile Style, had every opportunity to set things right and simply chose not to do so for no apparent reason, other than that being the victim of infringement pays better than being an ordinary licensor," she wrote.
The whole case highlights how messy the whole issue of administration and collection of royalties now is in the streaming world. One of the key issues seems to be the definition of the word ‘administration’. Judge Trauger concluded it that includes things like control over licensing, including synch licensing and collecting royalties. However, she pointed out that it doesn’t necessarily include any of those things.
And the contract between Kobalt and Spotify didn’t nail down this meaning of the word ‘administration’, leading to a situation where Spotify did not even know that control of licensing for Eminem’s catalogue was no longer in Kobalt’s hands for the US and Canada.
It may be some time before the implications of the ruling become clear. But what is clear is that the question of who administers, who collects royalties and who licenses, needs simplifying. The only people benefiting from the current confusion are the lawyers.
