Legal News
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It’s been nearly five years since Pop Smoke (Bashar Jackson) was killed in California’s Hidden Hills — and now, the only adult defendant in the murder trial has reached a plea deal. According to Rolling Stone, Corey Walker, 24, pleaded guilty to voluntary manslaughter and home invasion robbery charges in Los Angeles court on Wednesday […]
The estate of legendary rapper Notorious B.I.G. is suing Target, Home Depot and others over allegations that they sold unauthorized canvas prints of the famed “King of New York” photo that was snapped just days before his death.
In a lawsuit filed Tuesday in federal court, Notorious BIG LLC claims the retailers sold prints illegally created by iCanvas – a small firm that the estate says showed a “complete disregard for celebrities’ personality rights, lack of respect for artists’ efforts, and disdain for intellectual property law.”
“Defendants specifically chose to use Mr. Wallace’s persona, name, image, likeness … in an attempt to capitalize on their fame and extraordinary financial value,” Biggie’s estate writes, referring to his legal name, Christopher George Latore Wallace.
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The image at issue in the new lawsuit is “The King Of New York” – a portrait of Biggie wearing a gold crown in front of a red backdrop, snapped in March 1997 only three days before the rapper was killed in a Los Angeles shooting.
The photos — taken by photographer Barron Claiborne, who is also named as a plaintiff in the lawsuit — are some of the most well-known images of the late rapper. One is featured in a huge mural in his Bedford-Stuyvesant neighborhood of Brooklyn, and the plastic crown featured in the image sold at auction in 2020 for a whopping $594,750.
In their Tuesday lawsuit, the estate and Claiborne say that iCanvas sold canvas prints of the images for more than eight years without permission. In addition to selling them directly, the lawsuit claims the prints were also sold by Bed Bath & Beyond, Home Depot, Nordstrom and Target – each of which is named as a defendant in the lawsuit.
When contacted about the problem in 2023, Home Depot, Nordstrom and Target removed the offending products, the lawsuit says, but iCanvas and Bed Bath & Beyond allegedly continue to sell them.
The case claims that the sale of the images not only infringed Claiborne’s copyrights to the King images, but also breached federal trademark law and violated the rapper’s likeness rights.
“Mr. Wallace’s fan base has continued to expand since his passing,” the estate’s lawyers write. “Mr. Wallace’s persona, name, image, likeness, and artistic works are so well known that they are almost universally and instantly recognizable, even by those born after he died.”
The case could portend bigger problems for iCanvas. The lawyers for Biggie’s estate say they’re only a few of the “victims” of a “multi-year unlawful campaign” by the company to sell unauthorized prints of famous people and images, including musicians Beyonce, Prince, Jay-Z, Snoop Dog and LL Cool J.
None of the defendants immediately returned requests for comment on Wednesday.
It’s not the first time the Notorious B.I.G. estate has sued over photographs. In 2019, the estate sued hip-hop photographer Chi Modu over his famed 1996 image of Biggie standing in front of the World Trade Center. Though Modu owns the copyrights to the image, the estate claimed he was violating the rapper’s likeness rights by using it on merchandise.
That case settled last year on undisclosed terms – a deal that came with a warning from the estate’s attorneys about the use of his image: “Pictures of Christopher cannot be commercially exploited without a license from our client.”
This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Experts weigh whether Kendrick Lamar can play “Not Like Us” during his Super Bowl halftime show amid Drake’s defamation lawsuit; Spotify wins a ruling dismissing a lawsuit over streaming royalties; federal prosecutors file a superseding indictment against Sean “Diddy” Combs; and much more.
THE BIG STORY: Can Kendrick Play ‘Not Like Us’ At The Super Bowl?
Under normal circumstances, it’s silly to even ask the question. Obviously a Super Bowl halftime performer will play their chart-topping banger — a track that just swept record and song of the year at the Grammys and was arguably music’s most significant song of the past year.
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But these are very much not normal circumstances. Last month, Drake sued Universal Music Group over Kendrick Lamar‘s “Not Like Us,” claiming the label spread the song’s “malicious narrative” — namely, that Drake is a pedophile — despite knowing it was false.
That pending legal action makes it fair to wonder: When Lamar steps onto the world’s biggest stage on Sunday night, will he face pressure to avoid the whole mess by just skipping “Not Like Us” entirely?
To answer that question, I turned to top legal experts – who told me that Drake probably won’t win in court, but that corporate legal departments are also famously risk averse and might want to avoid trouble. For the full breakdown of how Sunday might go, read my entire story here.
Other top stories this week…
SPOTIFY BEATS ‘BUNDLE’ CASE – A federal judge dismissed a lawsuit filed against Spotify by the Mechanical Licensing Collective, rejecting the group’s allegations that the streamer illegally slashed its music royalty rates. The lawsuit, filed last year, accused Spotify of bookmaking trickery – namely, claiming that the addition of audiobooks to the platform entitled the company to pay a lower “bundled” rate for music. But in her ruling, the judge said Spotify had done nothing wrong under “unambiguous” regulations – and that if anything, the company had paid too much in royalties.
A.I. COPYRIGHT REPORT – The U.S. Copyright Office issued a long-awaited report on artificial intelligence. The report’s overall message was hardly groundbreaking: only human authors are eligible for copyrights, but material created with the assistance of AI can qualify on a case-by-case basis. But it included key assurances for existing music industry practices — saying using AI as a “brainstorming tool” to help write a song, or using it to assist in a recording studio session, would not automatically void copyright protection for the resulting songs.
TERMINATION GOES GLOBAL? A Louisiana federal judge issued an unusual legal decision on copyright termination, breaking with existing precedents and handing a major win to songwriters and their heirs. Ruling on a dispute over the 1963 rock classic “Double Shot (Of My Baby’s Love),” the judge said that termination rules apply not just to American copyrights but also to the rights to a song around the world – an outcome that legal experts have said would represent a “major upheaval” and could “radically revolutionize the way the music business runs.” The losing party in the case, who has warned the decision will cause “chaos,” is almost certain to appeal the ruling.
LYFT DISCRIMINATION CASE – A Detroit rapper named Dank Demoss (Dajua Blanding) filed a discrimination lawsuit against Lyft over allegations that one of the company’s drivers told her she was “too big” for the backseat of his car and that “his tires were not capable of supporting plaintiff’s weight.” In a viral video of the January incident, the driver can be heard telling Blanding that he’s “been in this situation before,” and that she needs to order a pricier “Uber XL” to accommodate her size.
UPDATED DIDDY INDICTMENT – New York federal prosecutors filed a superseding indictment against Sean “Diddy” Combs, adding additional victims and new allegations in the sprawling criminal case against him. Among the new claims: that he or his associates paid a $100,000 bribe to hotel staff to bury the now-infamous surveillance video of him assaulting his ex-girlfriend Cassie Ventura in 2016. Another civil lawsuit was also filed against Combs, the latest in a long list of such cases filed by Texas attorney Tony Buzbee.
Sean “Diddy” Combs has been hit with a pair of new sexual assault lawsuits that allege he drugged and sexually assaulted the plaintiffs and/or forced them to engage in sex acts with others during a “group-sex” party at Trump Hotel in midtown Manhattan.
Filed in New York state court on Tuesday (Feb. 4), the lawsuits — the latest to be lodged by Texas attorney Tony Buzbee against the disgraced hip-hop mogul — were filed by Jane Doe plaintiffs who say they were involved in the New York hip-hop scene in the ’80s and ’90s.
The first complaint was filed by a woman who says she was “an active member of New York’s hip-hop industry from the 1980s onward” and “appeared in numerous music videos for varying hip hop artists, was employed as a hip hop dancer for live productions, as well as having roles in major motion pictures.” According to the complaint, she was subject to “sexual assault, coercion, abuse and violence either at the hands of, or direction of Combs” on numerous occasions.
In the first alleged incident, the woman claims she was drugged and “forced to participate in group sexual activity” with Combs and others while attending (and being prevented from leaving) a so-called “shadow party” held at a New York bar sometime in the 1990s.
Later in the decade, while allegedly dating Combs’ security guard, the woman says she attended another of Combs’ parties at the five-story New York nightclub Limelight, where she says “group-sex parties” were occurring on the top two floors. After the party, she claims Combs and the security guard took her and a friend to a penthouse at a Trump hotel in midtown Manhattan, where she says she was “physically and sexually assaulted” by the guard as Combs watched. Later that evening, she claims she and her friend were forced to take “ecstasy or [a] similar ‘party’ drug” and “engage in a group sex activity that [they] did not want to participate in.”
This alleged incident is echoed in the second lawsuit filed on Tuesday by a woman who claims she was “a part of the hip-hop scene that was developing in New York City” in the ’80s and ’90s and “appeared in numerous music videos for various hip-hop artists and participated in other projects within the industry.”
After attending a party also allegedly held at the Limelight — which reads like the same event described by the first plaintiff — the woman claims she and a friend were taken to the Trump Hotel in midtown Manhattan against their will, drugged “and forced to participate in group-sex activity during which she [was] sexually assaulted over the next several hours. For instance, Plaintiff was vaginally raped by a club promoter at Combs’ direction, while Combs observed.”
The woman also outlines a second incident she says occurred after she was hired to serve as a “bottle-service attendant” at a party Combs hosted in the Hamptons in 1997. Shortly after arriving at the event, the woman says she and others hired for the event were encouraged by Combs to drink from coolers and offered marijuana, after which she “began to feel woozy, slipping in and out of consciousness.” At this point, she says she was “sexually assaulted and vaginally raped by Combs’ associates, at Combs’ direction, while Combs was present.” After suspecting the assault was videotaped, she says she reached out to Combs “to request that he delete the video, but Combs refused to comply.”
The woman further alleges she “suffered several incidences of sexual assault at Combs’ hands while traveling to other states, including California,” though only the New York incidents are included in the complaint.
Both women are asking for compensatory and punitive damages from Combs and his various Combs Global businesses, which are named as co-defendants for “enabl[ing]” the alleged abuse.
A representative for Combs and Combs Global did not immediately respond to Billboard‘s request for comment.
Combs is currently awaiting the start of his criminal trial, which is set to commence on May 5, at the Metropolitan Detention Center in Brooklyn. He is charged with running a criminal enterprise aimed at satisfying his need for “sexual gratification.” Among other accusations, Combs is alleged to have held so-called “freak offs” during which he and others drugged victims and coerced them into having sex. He is also accused of acts of violence and intimidation to silence his alleged victims. Combs faces a potential life prison sentence if convicted on all charges.
Will Drake’s pending defamation lawsuit stop Kendrick Lamar from performing “Not Like Us” during his Super Bowl halftime performance? Legal experts say it might — but that it really shouldn’t.
Under normal circumstances, it’s silly to even ask the question. Obviously a Super Bowl halftime performer will play their chart-topping banger — a track that just swept record and song of the year at the Grammys and was arguably music’s most significant song of the past year.
But these are very much not normal circumstances. Last month, Drake filed a lawsuit over “Not Like Us,” accusing Universal Music Group of defaming him by boosting the scathing diss track. The case, which doesn’t name Lamar as a defendant, claims UMG spread the song’s “malicious narrative” — namely, that Drake is a pedophile — despite knowing it was false.
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That pending legal action makes it fair to wonder: When Lamar steps onto the world’s biggest stage on Sunday night (Feb. 9), will he face pressure to avoid the whole mess by just skipping “Not Like Us” entirely?
He shouldn’t, legal experts say, and for a pretty simple reason: Drake’s lawsuit against UMG is a legal loser. “I don’t think the case is strong at all,” says Samantha Barbas, a legal historian and an expert in defamation law at the University of Iowa’s College of Law.
For Drake to eventually win the case over “Not Like Us,” he’ll need to show that Lamar’s claims about him are provably false assertions — meaning the average person would hear them and assume Kendrick was stating actual facts. Barbas says that’ll be tough for Drake to do about a diss track, where fans expect bombast and “rhetorical hyperbole” more so than objective reality.
“In the context of a rap battle, the average listener is going to know that the allegations aren’t to be taken seriously,” she says. “Taunts and wild exaggerations are par for the course.”
Another challenge for Drake is that he’s a public figure. Under key First Amendment rulings by the U.S. Supreme Court, a public figure like Drake must show that UMG either knew the lyrics were false or that the company acted with reckless disregard for the truth — a legal standard that’s intentionally difficult to meet so that rich and famous people don’t abuse libel lawsuits to squelch free speech.
“A high-profile public figure like Drake immediately enters the case with a high burden of proof,” says Roy Gutterman, the director of the Newhouse School’s Tully Center for Free Speech at Syracuse University.
UMG’s attorneys will also likely point to the fact that Drake himself made harmful allegations against Kendrick earlier in the same exchange of diss tracks, including that Lamar had abused his fiancée and that one of his children was fathered by another man. Were those defamatory statements of fact, or merely the exercise of artistic license within the conventions of a specific genre of music?
“Factoring in the context here — music and art within an ongoing dispute between rival musicians — he has an even tougher case,” Gutterman says.
So if Drake’s case is likely to eventually be dismissed, then there’s no reason for Kendrick to hold back on Sunday, right?
Not exactly.
For starters, Federal Communications Commission rules prohibit the airing of “obscene, indecent, or profane content” on broadcast television during primetime hours. To avoid those rules, Super Bowl halftime performers typically avoid curse words or overtly sexual material — something that would probably already preclude the “pedophile” line and other lyrics in “Not Like Us.”
Corporate legal departments are also famously risk averse, and often prefer to play it safe rather than potentially face expensive litigation, even if they’d ultimately win. That could lead any of the big companies involved here to put pressure on Kendrick to skip “Not Like Us.” His label, UMG, has vowed to fight back against Drake’s “frivolous” lawsuit, but might not want to add complications mid-litigation; the game’s broadcaster, Fox, or the NFL itself might worry about getting added to the suit as defendants.
Gutterman said it would be “a significant stretch of liability law” for Drake to successfully sue Fox or the NFL simply because Kendrick played “Not Like Us” at the halftime show. But in practice, that might not be how their in-house attorneys are thinking about it.
“The threat of litigation can have a chilling effect on speech,” Barbas says. “The safe thing to do is not to publish or broadcast.”
Reps for Lamar did not return a request for comment on whether he’ll perform the song. The British tabloid newspaper The Sun, citing anonymous sources, reported last week that Kendrick has faced pressure to skip the track but plans to perform it anyway and “won’t be silenced.” But that report could not be confirmed by Billboard and was not widely re-reported by other outlets.
Asked whether they have a position on whether Lamar plays the song, reps for UMG, Fox, the NFL and Roc Nation (Jay-Z’s company that produces the halftime show) all either declined to comment or did not return requests for comment.
When the show kicks off on Sunday night, the most likely outcome is probably somewhere down the middle: That Kendrick plays the song’s already-iconic instrumental hook and perhaps some of the lyrics, but skips any of the portions that are directly at play in Drake’s lawsuit.
“It wouldn’t be surprising,” Barbas says, “if the challenged lyrics are changed.”
Sean “Diddy” Combs has been hit with yet another lawsuit, this one filed by a man who says the hip-hop mogul drugged and sexually assaulted him at a Los Angeles party in 2015 after luring him with the promise of a record deal.
The new lawsuit was filed Monday (Feb. 3) in New York state court by Texas attorney Tony Buzbee, who has already filed a slew of other lawsuits against Combs. In it, a man identified only as John Doe claims that before performing for an audience at a Los Angeles venue called QC’s 20/20 with Combs in attendance, “a long-time and wellknown associate of Combs” told him “that Combs had heard of his talent and would be watching him perform. The associate specifically told Doe that if he performed well, Combs would discuss getting a deal with Bad Boy Records and arrange studio time between him and Combs.”
Following the performance, the man says that he attended an afterparty in the back of club, during which he was handed an “alcoholic beverage” containing Ciroc — Combs’ vodka brand — that was allegedly “from Combs himself.” After consuming the drink, the man claims he “quickly felt lightheaded and began slipping in and out of consciousness.”
During this time, according to the complaint, “Doe observed Combs and his entourage engaging in group sexual activity, often with other attendees who appeared either drugged, unconscious, or as if they were paid escorts. Doe believed most of the men participating in the sexual activities belonged to Combs’ entourage.”
At one point, the man claims that he regained consciousness to see Combs “grabbing his crotch while his pants had already been removed,” adding that “he believes that Combs had been performing oral sex on him because his penis was noticeably wet.” He goes on to allege that after regaining consciousness again, he “attempted to fight Combs off, but Combs’ security team stepped in,” and that Combs subsequently “threatened” him, “stating that he could easily contact his manager and ruin any chances he had of succeeding in the music industry if he did not comply.”
At this point, the man claims Combs ordered him “to have sex with a woman he did not know while Combs wanted to watch,” but that he escaped the venue after convincing Combs and his security team to let him use the bathroom.
He says that after the assault, he was afraid to report the alleged assault for fear of being blackballed in the music industry and later experienced “pain and suffering, mental anguish, physical impairment and emotional torment,” adding that it “greatly affected” his desire to continue pursuing a music career.
Also named as defendants in the suit are Combs’ various business entities under the Combs Global umbrella, which are alleged to have “enabled” the assault.
The man is asking for compensatory and punitive damages.
“As we’ve said before, Mr. Combs cannot respond to every new publicity stunt, even in response to claims that are facially ridiculous or demonstrably false,” said attorneys for Combs in a statement sent to Billboard. “Mr. Combs and his legal team have full confidence in the facts and the integrity of the judicial process. In court, the truth will prevail: that Mr. Combs never sexually assaulted or trafficked anyone — man or woman, adult or minor.”
Combs is currently awaiting the start of his criminal trial, which is set to commence on May 5, at the Metropolitan Detention Center in Brooklyn. He is charged with running a criminal enterprise aimed at satisfying his need for “sexual gratification.” Among other accusations, Combs is alleged to have held so-called “freak offs” during which he and others drugged victims and coerced them into having sex. He is also accused of acts of violence and intimidation to silence his alleged victims. Combs faces a potential life prison sentence if convicted on all charges.
A Louisiana federal judge has finalized an unusual legal decision that says American copyright termination rules apply not just stateside but also across the globe, unswayed by warnings that it will cause “destabilization of long-settled business practices” in the music industry.
Ruling on a dispute over the 1963 rock classic “Double Shot (Of My Baby’s Love),” Judge Shelly Dick said Thursday that songwriter Cyril Vetter could win back full copyright ownership to the track from publisher Resnik Music Group via termination — an important federal provision that allows artists to take back their rights decades after they sold them away.
What makes the ruling notable is that Judge Dick said Vetter could recapture rights to the song “throughout the world,” not just in the U.S. That’s a big departure from the status quo under longstanding legal precedents, which say that reversions apply only to the American market and have no effect on rights in foreign countries.
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Resnik has warned that such a decision will be deeply disruptive to the music industry. In court filings, the company has argued it will “upend” existing practices and could even violate international treaty obligations: “The result would be chaos … rather than the orderly system that the nations of the world have in fact developed over more than a century.”
Music attorneys have also taken notice. Tal Dickstein, a prominent litigator at the law firm Loeb & Loeb, wrote in August that Judge Dick was “breaking with existing precedent” by extending the power of termination overseas. Eric J. Schwartz, an attorney at the firm Mitchell Silberberg & Knupp, said the ruling would be a “major upheaval” if upheld (though he said that “seems unlikely”). Bill Hochberg, another longtime music attorney, went much further, saying the “Double Shot” case could “radically revolutionize the way the music business runs” and might be “financially devastating” for large entertainment companies.
The ruling for Vetter — largely explained in an earlier decision last summer and finalized in Thursday’s judgment — is likely to be challenged at a federal appeals court; defense attorneys already attempted to file an appeal at an earlier stage in the case. An attorney for Resnik did not immediately return a request for comment on the ruling on Friday (Jan. 31).
If it were to be adopted in courts across the country, Judge Dick’s approach would be a boon for songwriters and their heirs. Under existing precedent and practices, publishers often continue to own foreign rights even after a U.S. termination, giving them potential veto power over cross-border projects and a bargaining chip in negotiations with the artist. Under the new ruling, songwriters would get back all of their rights, not just their American copyright.
For Tim Kappel, the attorney who represented Vetter in the case, that’s exactly the point — helping songwriters truly get the artist-friendly protections that federal lawmakers envisioned when they created the termination right in the 1970s.
“The [ruling] is consistent with Congress’ intent to provide creators with a second chance to benefit from the fruits of their labor,” Kappel tells Billboard. “There’s a fundamental fairness to that result that Mr. Vetter is dedicated to defending.”
Asked about the cries of “chaos” from his opponents, Kappel called those claims “speculative and fairly alarmist.” As to whether the ruling will “destabilize” music industry practices, he said those practices might just be ripe for disruption.
“A court is not bound to interpret the Copyright Act so as to conform to comfortable business practices,” Kappel said. “In fact, to the extent these business practices rely on misguided legal theories that prevent artists and writers from receiving the full benefit of their termination rights, we believe such practices are rightfully destabilized.”
Prosecutors have filed a superseding indictment against Sean “Diddy” Combs that includes additional victims and new allegations in the sprawling criminal case against him, according to documents entered in New York federal court on Thursday (Jan. 30). Though it includes no new charges, the amended indictment extends the amount of time Combs allegedly operated a […]
A new federal report on artificial intelligence says that merely prompting a computer to write a song isn’t enough to secure a copyright on the resulting track — but that using AI as a “brainstorming tool” or to assist in a recording studio would be fair game.
In a long-awaited report issued Wednesday (Jan. 29), the U.S. Copyright Office reiterated the agency’s basic stance on legal protections for AI-generated works: That only human authors are eligible for copyrights, but that material created with the assistance of AI can qualify on a case-by-case basis.
Amid the surging growth of AI technology over the past two years, the question of copyright coverage for outputs has loomed large for the nascent industry, since works that aren’t protected by copyrights would be far harder for their creators to monetize.
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“Where that [human] creativity is expressed through the use of AI systems, it continues to enjoy protection,” said Shira Perlmutter, Register of Copyrights, in the report. “Extending protection to material whose expressive elements are determined by a machine, however, would undermine rather than further the constitutional goals of copyright.”
Simply using a written prompt to order an AI model to spit out an entire song or other work would fail that test, the Copyright Office said. The report directly quoted from a comment submitted by Universal Music Group, which likened that scenario to “someone who tells a musician friend to ‘write me a pretty love song in a major key’ and then falsely claims co-ownership.”
“Prompts alone do not provide sufficient human control to make users of an AI system the authors of the output,” the agency wrote. “Prompts essentially function as instructions that convey unprotectible ideas.”
But the agency also made clear that using AI to help create new works would not automatically void copyright protection — and that when AI “functions as an assistive tool” that helps a person express themselves, the final output would “in many circumstances” still be protected.
“There is an important distinction between using AI as a tool to assist in the creation of works and using AI as a stand-in for human creativity,” the Office wrote.
To make that point, the report cited specific examples that would likely be fair game, including Hollywood studios using AI-powered tech to “de-age” actors in movies. The report also said AI could be used as a “brainstorming tool,” quoting from a Recording Academy submission that said artists are currently using AI to “assist them in creating new music.”
“In these cases, the user appears to be prompting a generative AI system and referencing, but not incorporating, the output in the development of her own work of authorship,” the agency wrote. “Using AI in this way should not affect the copyrightability of the resulting human-authored work.”
Wednesday’s report, like previous statements from the Copyright Office on AI, offered broad guidance but avoided hard-and-fast rules. Songs and other works that use AI will require “case-by-case determinations,” the agency said, as to whether they “reflect sufficient human contribution” to merit copyright protection. The exact legal framework for deciding such cases was not laid out in the report.
The new study on copyrightability is the second of three studies the agency is conducting on AI. The first report, issued last year, recommended federal legislation banning the use of AI to create fake replicas of real people; bills that would do so are pending before Congress.
The final report, set for release at some point in the future, deals with the biggest AI legal question of all: whether AI companies break the law when they “train” their models on vast quantities of copyrighted works. That question — which could implicate trillions of dollars in damages and exert a profound effect on future AI development — is already the subject of widespread litigation.
Spotify won a ruling Wednesday dismissing a lawsuit from the Mechanical Licensing Collective that accused the streamer of unfairly slashing royalty rates, with a federal judge ruling that Spotify’s move was supported by “unambiguous” regulations.
The MLC sued last year, claiming Spotify had “unilaterally and unlawfully” chosen to cut its music royalty payments nearly in half through bookmaking trickery – namely, by claiming that the addition of audiobooks to the platform entitled the company to pay a lower “bundled” rate.
But in her decision on Wednesday, Judge Analisa Torres said that federal royalty rate rules clearly allowed Spotify to legally claim the lower rate, rejecting MLC’s argument that the company was not actually offering a “bundle” of services.
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“Audiobook streaming is a product or service that is distinct from music streaming and has more than token value,” the judge wrote, alluding to the specific wording of the federal rule. “Premium is, therefore, properly categorized as a Bundle.”
A spokeswoman for the MLC did not immediately return a request for comment on the ruling.
The MLC, which collects streaming royalties for songwriters and publishers, filed its lawsuit in late May — a week after Billboard estimated that Spotify’s move would result in the company paying roughly $150 million less over the next year. In its complaint, the MLC claimed Spotify was “erroneously recharacterizing” the nature of its streaming services to secure the lower rate.
“The financial consequences of Spotify’s failure to meet its statutory obligations are enormous for songwriters and music publishers,” the group’s attorneys wrote at the time. “If unchecked, the impact on songwriters and music publishers of Spotify’s unlawful 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 offering, it’s now entitled to pay a discounted “bundled” royalty rate under the federal legal settlement that governs how much streamers pay rightsholders.
In Wednesday’s ruling, Judge Torres agreed. She said the rules required only that Spotify offered a different service and that it provided users with more than “token value” – and that the addition of audiobooks was clearly covered by those terms.
MLC’s attorneys had argued that audiobooks were that kind of “token” non-factor, since Spotify didn’t raises prices when it added them and only a small proportion of subscribers actually listen to them. MLC had claimed Spotify added the books was merely a “pretext” to cut rates for music.
Spotify moved to dismiss the case in August, calling it “nonsensical” and “wasteful.” The company’s attorneys blasted the MLC’s argument that the audiobooks were aimed at a legal loophole, saying it “profoundly devalues the contributions of the tens of thousands of book authors.”
In her decision on Wednesday, Judge Torres sided with Spotify’s argument. Though she said the new offering might strike ordinary consumers as more of a “two-for-one deal” than a traditional bundle, she said Spotify’s addition of the books had clearly brought more than nominal value to its users.
“MLC cannot plausibly claim that having access to audiobooks is not something of intrinsic and monetary value to many, even if only a fraction of Spotify’s millions of Premium subscribers may take advantage of it,” the judge wrote. “The court can draw only one conclusion: that 15 hours of monthly audiobook streaming is a product or service that has more than token value.”
If anything, Judge Torres said, Spotify had “likely paid more in royalties to MLC than it was otherwise required to pay” because it did not immediately claim bundled status after introducing the audiobook feature.
In addition to dismissing the lawsuit, Judge Torres did not give MLC a chance to refile the case, saying the law was clear and that amending the accusations would be futile. The group can still challenge the ruling at a federal appeals court, however.
In a statement to Billboard on Wednesday, a Spotify spokesperson said the company was “pleased” with the court’s decision: “Bundle offerings play a critical role in expanding the interest in paying for music and growing the pie for the music industry. We know the regulations can be complex, but there’s plenty of room for collaboration—and our recent deal with [Universal Music Publishing Group] shows how direct licenses can create flexibility and additional benefits.”