Eminem publisher sues Spotify over royalties, challenges licensing law

The co-owner of the publishing rights for songs by hip-hop artist Eminem sued Spotify in Nashville on Wednesday in a major copyright lawsuit that challenges the underpinnings of the landmark Music Modernization Act.

A key component of the Act was shifting the onus of licensing songs away from the streaming services and to the new licensing organization that will be run by publishers and songwriters.

Spotify was the subject of several expensive lawsuits and subsequent settlements, including with the National Music Publishers Association. The Music Modernization Act included a provision that makes it extremely difficult for copyright owners who failed to file a lawsuit prior to Dec. 31, 2017, to seek legal remedies.

The NMPA and other stakeholders garnered the support of the streaming services for the Act largely by including the provision that protects Spotify, Apple Music and others from such copyright lawsuits.

The lawsuit by Eight Mile Style against Spotify challenges that component of the law. Eight Mile Style, which co-owns and maintains administrative rights to Eminem’s 243 songs, claims Spotify has not properly licensed the songs or paid the company its publishing royalties.

Eight Mile Style also argues the cutoff date is unconstitutional because it violates property rights and due process.

“It goes without saying that this is a very important case for every songwriter whose songs stream on Spotify or any other digital music provider,” said Nashville-based entertainment industry attorney Richard Busch, who has represented other clients who sued Spotify before the 2017 cutoff date.

Lawsuit: Spotify did not do enough to match songs to copyright owners

The plaintiff also claims that the provision in the Music Modernization Act that protects Spotify only applies to unmatched songs — those for which streaming companies could not locate a copyright owner. Spotify had identified Eight Mile Style as the publisher of Eminem’s songs, so they wouldn’t meet the definition of “unmatched.”

The company claims in its lawsuit that even if the court interprets the new law as applying to matched works, Spotify’s matching efforts have not met the good-faith, commercially reasonable efforts demanded by the Music Modernization Act.

The lawsuit claims that as part of the settlement agreement in the NMPA lawsuit, Spotify sought to identify the copyright owners for unmatched songs who would be owed money under the terms of the settlement.

Spotify partnered with music technology firm HFA to find owners of the unmatched songs. According to the lawsuit, HFA was only able to identify 15% of the unmatched songs.

That meant revenue for the remaining 85% of the unmatched songs was paid to publishers based on their market share, according to the lawsuit.

“Spotify’s conduct in continuing to use HFA to match was not commercially reasonable. Spotify therefore does not have the MMA liability limitations for this reason as well,” Eight Mile Style claims in its lawsuit.

According to the suit, Spotify has also not paid Eight Mile Style on time or sent accurate reports showing how much is owed. Eminem averages over 32 million monthly listeners on Spotify and his most popular songs have hundreds of millions of streams. “‘Till I Collapse” alone has 701 million streams.

Eminem is not a party to the lawsuit.

Reach Nate Rau at 615-259-8094 and nrau@tennessean.com. Follow on Twitter @tnnaterau.