Professional Documents
Culture Documents
Defendant Spotify USA Inc.s (Spotify or Defendant) Motion for a More Definite
Statement (the Motion), pursuant to Rule 12(e) of the Federal Rules of Civil Procedure, is the
second baseless motion filed by Spotify in this very young case, before the filing of any Answer
or responsive pleading. It is clearly meant to drive up Plaintiffs costs, and, additionally, results
in the wasting of judicial resources.1 (DI 28). Plaintiff, therefore, not only files this Opposition,
but also a request that the Court award sanctions against Defendant pursuant to 28 U.S.C. 1927
for vexatiously multiplying the proceedings, or its inherent power to award sanctions.
Defendants Motion reads more like a press release rather than a motion for a more
definite statement, in which it: (1) basically calls Plaintiffs counsel greedy and ascribes
nefarious motives to Plaintiffs counsel2 (DI 29 at 2, 5); (2) protests (too much) that Spotify is
1
Just two weeks prior, Spotify filed an untimely motion for expedited discovery, which was
equally baseless and a complete waste of judicial resources. (DI 18). It was also filed without a
proper meet and confer under this Courts Rules. The Court denied Spotifys motion. (DI 27).
Only hours later, Spotify filed the current Motion. (DI 28).
2
See, e.g., (DI 29 at 5) (More opt-outs equal a larger number of copyrighted works that Plaintiff
1
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not a modern day Napster, when it has in fact engaged in willful and widespread copyright
infringement by willfully failing to obtain appropriate licenses, which is precisely what Napster
did; (3) attaches articles detailing Spotifys purported good deeds (DI 29 at 3-5), while ignoring
the litany of articles to the contrary; (4) attempts to relate the present Motion to the Ferrick class
settlement (DI 29 at 2, 5, 9); (5) attempts to advance the knowingly frivolous argument that
requiring a mechanical license (DI 29 at 2, 6-8), when it has admitted publicly that such is not
the case, and that it is obligated to obtain mechanical licenses in order to lawfully operate its
interactive service; and (6) knowingly attempts to confuse the clearly established distinction
between interactive streaming and non-streaming (DI 29 at 6-7), and the need to obtain
mechanical licenses for interactive streaming, by ignoring, in the very cases Defendant cites, the
distinction between them, other universal authority on the subject, and, again, its own public
request for a more definite statement, and the few portions of Defendants Motion that are
relevant to such a request seemingly ignore the substance of Plaintiffs Complaint, and legal
authority. If Spotify had a basis for a motion to dismiss, it would have filed it, instead of this
concocted Motion that, as discussed below, is filed in complete bad faith, and is a waste of
judicial resources. As explained more fully below, while Spotify asserts that it is left guessing
with respect to how, and through what conduct, Spotify is alleged to have violated copyright
law (DI 29 at 1), it does so by ignoring swatches of Plaintiffs Complaint (which spans over
can join to its lawsuits, which means, principally, a larger potential payday for Plaintiffs
counsel.); (DI 29 at 2) (Plaintiff and its counsel hope to entice additional class members to opt
out.).
2
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twenty pages, and sets forth eighty allegations in plain English), and describes in detail how
Spotify built its business by failing to obtain appropriate licenses, failing to comply with Section
115 of the United States Copyright Act, and reproducing and distributing the musical
compositions at issue in this case in violation of the law. (See, e.g., DI 1 at 4, 22, 23, 33-37,
Defendants Motion must be denied because there can be no doubt that Defendant, like
thousands of others who have read and commented on this action, knew full-well the allegations
against Spotify after reading Plaintiffs Complaint. Plaintiffs allegations are neither
rarely granted5 Motion should be denied, and Spotify sanctioned for unreasonably multiplying
these proceedings.
3
See, e.g., Nate Rau, Spotify sued for Guns 'N Roses, Willie Nelson, Miranda Lambert songs,
USA Today (July 19, 2017 1:51 PM), https://www.usatoday.com/story/tech/nation-
now/2017/07/19/spotify-sued-guns-n-roses-willie-nelson-miranda-lambert-songs/492215001/;
Erin M. Jacobson, Spotify May Have To Pay Songwriters $345 Million, Forbes (July 19, 2017
6:37 PM), https://www.forbes.com/sites/legalentertainment/2017/07/19/spotify-may-have-to-
pay-songwriters-345-million/#49023f04193d; Andrew Flanagan, Spotify Sued, Yet Again, Over
Compositions, NPR Music (July 21, 2017 10:05 AM),
http://www.npr.org/sections/therecord/2017/07/21/538501163/spotify-sued-yet-again-over-
compositions; Eriq Gardner, Spotify Hit With Two Lawsuits Claiming "Staggering" Copyright
Infringement, The Hollywood Reporter (July 18, 2017 2:20 PM),
http://www.hollywoodreporter.com/thr-esq/spotify-hit-two-lawsuits-claiming-staggering-
copyright-infringement-1021771; Janko Roettgers, Spotify Faces Two New Lawsuits From
Music Publishers, Variety (July 18, 2017 4:09 PM), http://variety.com/2017/digital/news/spotify-
faces-two-new-lawsuits-from-music-publishers-1202499249/; Sam Sodomsky, Spotify Sued for
Copyright Infringement Again, Pitchfork (July 19, 2017), https://pitchfork.com/news/spotify-
sued-for-copyright-infringement-again/.
4
Abbruzzino v. Hutchinson, No. 08-11534, 2009 U.S. Dist. LEXIS 31759, at *6 (E.D. Mich.
Apr. 15, 2009) (referring to a motion for a more definite statement as a highly disfavored
motion) (emphasis added) (See, Compilation of Unpublished Cases attached as Exhibit A).
5
Stewart v. Gracik, No. 1:10-cv-698, 2011 U.S. Dist. LEXIS 115665, at *12 (W.D. Mich. Aug.
26, 2011) (Rule 12(e) motions are rarely granted in view of the notice pleading standards of
Rule 8(a)(2)).
3
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STATEMENT OF FACTS
This action was filed on July 18, 2017. (DI 1). As alleged in the Complaint, Spotify is a
digital music service that provides access to millions of songs while, at the same time, knowingly
and willfully infringing the copyrights of creators of music. Plaintiffs Complaint sets forth the
factual allegations supporting its claim for willful copyright infringement in great detail. (DI 1).
Plaintiff served Defendant on July 25, 2017. (DI 11). On August 17, 2017, Defendant filed a
discovery motion prior to the parties conducting a discovery conference as required by Rule 26
of the Federal Rules of Civil Procedure, without conducting any meet and confer regarding any
potential discovery disputes as required by this Courts Practice and Procedure Manual and
Local Rule 37.01(b)(3), and despite the fact that Plaintiffs counsel expressly offered a timely
meet and confer regarding any potential discovery disputes. (DI 18; DI 20). Following Plaintiffs
opposition to Defendants discovery motion, Defendant sought leave to file, and filed, a reply
brief. (DI 21; DI 25). On August 30, 2017, the Court denied Defendants discovery motion. (DI
27). That same day, only hours later, Defendant filed this Motion seeking a more definite
Defendant filed its Motion despite the fact that Plaintiffs Complaint sets forth the
(DI 1 at 23).
4
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secured by negotiating with individual copyright owners, or, in the United States,
through a compulsory mechanical license.
(DI 1 at 34).
As Section 115 indicates, a licensor has the right to terminate any type of Section
115 license for failure to cure any provision of the licenses, including non-
payment of royalties, lack of certified statements, or late payments, after 30 days.
Furthermore, a material breach of the license agreement can terminate a license or
create a right of recapture. Spotify did not cure its failure to comply with any
Section 115 license it may have initially obtained within 30 days of the
aforementioned letters.
(DI 1 at 65).
Under either scenario, whether because Spotify never licensed the compositions,
or because any such licenses have been terminated, Spotify has continued to
exploit compositions, including the Infringed Works, without a license to do so
and has therefore engaged in continuous actionable acts of copyright
infringement.
(DI 1 at 68).
ARGUMENT
A. Overwhelming Case Law in this (and Every Other) Circuit Makes Clear that
Motions for a More Definite Statement are Disfavored and Rarely Granted.
Defendants Motion is No Exception.
Plaintiff agrees with Defendant that a more definite statement will be required when
defendants can only guess as to what conduct . . . an allegation refers. Paragon Fin. Grp., Inc.
v. Bradley Factor, Inc., No. 1:02-CV-222, 2003 U.S. Dist. LEXIS at *39 (E.D. Tenn. Dec. 4,
2003) (citations omitted). Plaintiffs Complaint clearly does not leave Defendant guessing as to
Spotifys alleged wrongdoings. (See, e.g., DI 1 at 4, 22-23, 33-37, 55-66, 68, 72, 74-77).
5
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Given the liberal pleading standard set forth in Rule 8, Rule 12(e) motions are disfavored.
Paragon Fin. Grp. v. Bradley Factor, Inc., No. 1:02-cv-222, 2003 U.S. Dist. LEXIS 22105, at
*38-39 (E.D. Tenn. Sep. 15, 2003) (citations omitted). Unsurprisingly, the Paragon Fin. Grp.
court (the very case cited by Defendant to support its Motion) denied defendants motions for a
more definite statement, despite the fact that fraud and the associated heightened pleading
standards was implicated. Tellingly, Defendant fails to set forth legal citations to support how, or
why, a Rule 12(e) motion is particularly appropriate here, as Defendant alleges. (See DI 29 at
2).
Pleading standards in federal court are not exacting, and [c]ourts disfavor motions for
more definite statements given the liberal pleading standards of Rule 8 and the opportunity for
pretrial discovery. Dotson v. Knox Cty., No. 3:15-CV-66-TAV-CCS, 2015 U.S. Dist. LEXIS
164494, at *11 (E.D. Tenn. Dec. 8, 2015) (citing Sallee v. Bd. of Prof. Responsibility of Supreme
Court, No. 3:15-CV-5, 2015 U.S. Dist. LEXIS 64314, at *35 (E.D. Tenn. May 18, 2015)
(citations omitted)); see also Adkisson v. Jacobs Eng'g Grp., Inc., No. 3:13-CV-505-TAV-HBG,
2017 U.S. Dist. LEXIS 68915, at *9 (E.D. Tenn. May 5, 2017) (citing Davis v. City of Memphis
Fire Dep't, No. 11-3076-STA-CGC, 2012 U.S. Dist. LEXIS 75128, at *7 (W.D. Tenn. May 31,
2012)) (same). [I]f the complaint meets the notice pleading requirements of Rule 8(a)(2) of the
Federal Rules of Civil Procedure, the motion should be denied. Dotson v. Knox Cty., No. 3:15-
CV-66-TAV-CCS, 2015 U.S. Dist. LEXIS 164494, at *11 (E.D. Tenn. Dec. 8, 2015) (quoting
Expert Janitorial, LLC v. Williams, No. 3:09-CV-283, 2010 U.S. Dist. LEXIS 23080, at *9 (E.D.
Plaintiffs Complaint alleges that Defendant must obtain a direct mechanical license or
comply with the compulsory license requirements of Section 115 in order to lawfully reproduce
6
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and distribute the musical works embodied in the sound recordings it makes available on its
interactive streaming service, i.e., the compositions at issue. (See, e.g., DI 1 at 33-37).
Plaintiff clearly alleges Spotify failed to obtain or maintain such a license. (See, e.g., DI 1 at
58-61). Additionally, Plaintiff alleges Spotify reproduced, distributed, and otherwise made
available the compositions at issue. (See, e.g., DI 1 at 4, 22, 23, 62, 65-66, 68, 72, 74-75). It
constitutes copyright infringement (aside from limited exceptions that clearly would not apply to
an entity such as Spotify, which is exploiting the compositions for a commercial purpose).
Plaintiff clearly alleges that Spotifys unlicensed reproduction and distribution of the
compositions at issue constitutes copyright infringement. (See, e.g., DI 1 at 62, 65-66, 68, 72,
74-75).
Therefore, Plaintiffs Complaint clearly provides Defendant fair notice of the wrongs
Defendant has allegedly committed. (See, e.g., DI 1 at 4, 22-23, 33-37, 55-66, 68, 72, 74-77).
In order for Defendant to prevail on its Motion, Defendant would have to show that Plaintiffs
Complaint is so vague or ambiguous that the party cannot reasonably prepare a response. Fed.
R. Civ. Pro. 12(e). The court should grant such a motion only when the complaint is so vague
or unintelligible that it is virtually impossible for the defendant to craft its responsive pleading.
Soumano v. Equifax Credit Info. Servs., No. 1:16-cv-313, 2016 U.S. Dist. LEXIS 96919, at *7
(S.D. Ohio July 25, 2016) (citing Monahan v. Smyth Auto., Inc., No. 1:10-CV-00048, 2011 U.S.
Dist. LEXIS 9877, at *7-8 (S.D. Ohio Feb. 2, 2011)). This is clearly not the case. In this case, it
is clear that [c]ommon sense inferences (backed by the utilization of the discovery process) will
reveal how-and if-the facts alleged support the violations alleged. Diaz v. G. Reynold Sims &
Assocs., P.C., No. 10-13419, 2011 U.S. Dist. LEXIS 335, at *1 (E.D. Mich. Jan. 4, 2011).
7
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Motions for a more definite statement should not be granted unless the complaint is so
seriously in attempting to answer it. United States v. Reyes, No. 15-cv-02459-STA-dkv, 2015
U.S. Dist. LEXIS 143481, at *7 (W.D. Tenn. Oct. 22, 2015) (citing Swierkiewicz v. Sorema N.A.,
534 U.S. 506, 514 (2002); Evans-Marshall v. Bd. of Educ. of Tipp City Exempted Vill. Sch. Dist.,
428 F.3d 223, 228 (6th Cir. 2005); E.E.O.C. v. FPM Group, Ltd., 657 F.Supp.2d 957, 966 (E.D.
Tenn.2009)).6
While Plaintiffs full Complaint provides greater context for Plaintiffs allegations, it
streaming service and the accompanying obligations under the United States Copyright Act to
read the allegations cited above and not be apprised of Plaintiffs claim. Furthermore, given this
is not the first (or second) time that Spotify has faced similar allegations, Spotify and its
sophisticated counsel know exactly what Plaintiff is alleging, and fully understand the
repercussions for failing to obtain and maintain Section 115 licenses for the musical
compositions embodied in the sound recordings offered through its interactive streaming service.
In fact, the Ferrick class settlement referenced repeatedly in Defendants Motion involved
similar claims.7
6
See also Scarbrough v. R-Way Furniture Co., 105 F.R.D. 90, 91 (E.D. Wis. 1985) (citing
Stanton v. Manufacturers Hanover Trust Company, 388 F. Supp. 1171, 1174 (S.D.N.Y. 1975))
(It is generally held that Rule 12(e) is designed to strike at unintelligibility rather than simple
want of detail.); Schwable v. Coates, No. 3:05 CV 7210, 2005 U.S. Dist. LEXIS 38419, at *2
(N.D. Ohio Aug. 18, 2005) (same).
7
Defendants previous motion seeking expedited discovery requested the Court to grant the
relief in order to allow Plaintiff (or the music publishers whose interests Plaintiff represents) an
opportunity to opt into the Ferrick class settlement. (DI 18 at 6-7). In that motion, which came
weeks prior the current Motion, Defendant appeared to be fully apprised of the claims against it.
Defendants Motion is unclear as to what, if anything, prompted this change in Defendants
understanding of the issues raised in the Plaintiffs Complaint.
8
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The cases are legion, and known fully by Spotifys counsel, that motions such as the
present Motion are summarily denied.8 While Plaintiff could continue to expound on the
numerous reasons Defendants highly disfavored and rarely granted Motion is baseless, a
cursory review of the pertinent document (Plaintiffs Complaint; see, e.g., DI 1 at 4, 22-23,
33-37, 55-66, 68, 72, 74-77), undercuts any alleged bases Defendant sets forth in its Motion. As
a result, Defendants Motion should be denied, and sanctions should be awarded Plaintiff based
B. Defendant Transparently Uses its Motion to Set Forth Assertions Not Grounded in
Law or Fact, Including Its Attempt to Compare Spotifys Interactive Service to
Inapplicable Non-Interactive Services and Suggesting Spotify is Not Required to
Obtain Mechanical Licenses for the Compositions Offered through its Service.
While the above argument alone is sufficient for this Court to deny Defendants Motion,
Defendant floats two assertions in its Motion that are wholly irrelevant to this Motion, but cannot
go unaddressed, including Defendants citations to case law and other authorities on pages 6 and
7 of its Motion. (DI 29 at 6-7). Spotify and its counsel are sophisticated parties who fully
understand Spotifys obligations under the United States Copyright Act. Spotifys suggestion
8
Diaz v. G. Reynold Sims & Assocs., P.C., No. 10-13419, 2011 U.S. Dist. LEXIS 335, at *22
(E.D. Mich. Jan. 4, 2011) (motions for a more definite statement are disfavored; their purpose is
better served by discovery)); Wills v. McLean Trucking Co., 76 F.R.D. 32, 33 (E.D. Tenn. 1977)
(The details of plaintiffs' claim are available to the defendant through utilization of the pretrial
discovery techniques.... Where, as here, a claim meets the requirements of Rule 8(a)(2), Federal
Rules of Civil Procedure, the Court will not require the plaintiffs to make a more definite
statement in their complaint.)); McCloy v. Corr. Med. Servs., No. 07-13839, 2008 U.S. Dist.
LEXIS 107622, at *3 (E.D. Mich. Dec. 18, 2008) (Federal courts generally disfavor motions for
more definite statements.) (emphasis added); Abrams v. Ciba Specialty Chems. Corp., No. 08-
0068-WS-B, 2008 U.S. Dist. LEXIS 68897, at *14 (S.D. Ala. Sep. 10, 2008) (As the formidable
standard set forth in Rule 12(e) suggests, [m]otions for more definite statement are viewed with
disfavor and are rarely granted.) (emphasis added). While the widespread disfavor of motions
for a more definite statement is clear from the above citations, there is ample authority that
would allow Plaintiff to continue citing such cases ad nauseam.
9
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that it, as an interactive streaming service,9 is not required to obtain mechanical license for the
musical compositions embodied in the sound recordings it offers through its interactive service,
Defendant asserts in its Motion, [t]his is not to say that streaming has no copyright
consequence. Streaming does result in a public performance of both sound recordings and
musical compositions. But Plaintiff does not allege that Spotify has violated its public
performance rights, and such an allegation would be futile. [(internal citations omitted)]. Spotify
has paid hundreds of millions of dollars to license the public performances of the musical
that Spotifyby virtue of obtaining public performance licensesis relieved of its duty to
obtain and maintain mechanical licenses for the musical compositions on its interactive service.
As Defendant is fully aware,10 and as discussed below, such an assertion could not be further
9
Spotify is the largest interactive streaming music service in the United States, offering
consumers the ability to receive digital audio transmissions of sound recordings and the musical
works embodied therein on an interactive and noninteractive basis . . . . (Exhibit B, Comments
of Spotify USA Inc. to USCO at p. 2) (emphasis added).
10
Under Section 115 of the Copyright Act licensees may obtain mechanical licenses by sending
Notices of Intention to either the copyright owner or, if the registration or other public records of
the Copyright Office do not identify the copyright owner and include an address at which notice
can be served, it shall be sufficient to file the notice of intention in the Copyright Office itself. 17
U.S.C. 115(b). The Section 115 NOIs filed by Spotify include filings as recently as September
3, 2017, meaning Spotify has continued to file Section 115 NOIs even after Defendant filed its
Motion. (See Section 115 NOIs Filed with the Copyright Office, available at
https://www.copyright.gov/licensing/115/noi-submissions.html). The fact that Spotify continues
to file NOIs under Section 115 for activity on its interactive streaming service, but in its Motion,
nevertheless claims to not understand how Plaintiffs Complaint implicates the rights of
reproduction and distribution is astounding.
10
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Spotify has made numerous statements that, individually and/or collectively, completely
undermine the arguments that Spotify apparently attempts to set forth in its Motion. Spotify has
expressly, and repeatedly, acknowledged that Spotify, an interactive streaming service, must
secure rights to reproduce and distribute the musical works embodied in its sound recordings, or
else face the crushing statutory damages available under the United States Copyright Act. In
Spotifys own words, [t]o 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 the musical works embodied therein, and the right to publicly perform sound
recordings and the musical works embodied therein by means of digital audio transmissions.
(Exhibit B, Comments of Spotify USA Inc. to USCO at p. 2) (emphasis added). Spotify secures
the right to reproduce and distribute the musical works embodied in sound recordings either
from musical work copyright owners (typically music publishers) through its licensing
administrator Harry Fox or pursuant to the statutory license set forth in Section 115 of the
Copyright Act. Spotify secures the right to publicly perform the musical works embodied in
sound recordings from the three performing rights organizations (PROs) in the United States
(i.e., ASCAP, BMI, and SESAC). (Id. at p. 2) (emphasis added). All of these licenses are
secured pursuant to the legal regime created by the Copyright Act. (Id.) (emphasis added).
To quote Spotify yet again, Spotify offers two types of streaming music services: a free-
to-users ad-supported service, which I will refer to as the ad-supported service, and a paid
subscription service, which I will refer to as the paid service. Both services pay three types of
royalties: (1) royalties to record labels for the public performance of sound recordings; (2)
11
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compositions, which I will refer to as PRO royalties; and (3) mechanical royalties to the
Harry Fox Agency (HFA). Both PRO royalties and mechanical royalties flow to publishers
and songwriters (through the PROs and HFA, respectfully), and both are for the use of
compositions.). Exhibit C, Written Direct Testimony of Paul Vogel (Vice President, Head of
Global Financial Planning and Analysis and Investor Relations at Spotify) on behalf of Spotify
USA Inc. at p. 2 (emphasis added). To illustrate mechanical royalties for both Spotifys ad-
supported service and paid service, Mr. Vogel provides illustrations from the Harry Fox Agency,
In fact, in its suggestions to the United States Copyright Office, Spotify expressly
acknowledges its inability/difficulty to secure and maintain Section 115 licenses (i.e., the very
Spotify believes that any reforms to the Copyright Laws should ensure the
following . . . Section 115 is modernized so that there is an efficient mechanism
for licensing large numbers of musical works, the ownership of which is often
split among multiple parties. This could involve licensing on a blanket basis,
whether voluntary or compulsory. . . . The rights to musical works, however, are
often split among numerous parties, typically music publishers that represent the
rights of individual songwriters. . . . This means that in order to avoid liability
for copyright infringement and the crushing statutory damages available
under the Copyright Laws Spotify must obtain licenses from each co-author
owning a share in an individual work, no matter how small that co-authors
interest might be[.]
(Exhibit B, Comments of Spotify USA Inc. to USCO at pp. 3-4) (emphasis added).
this regard would be contrary to, at least, (1) the United States Copyright Act (discussed herein);
11
Mr. Vogel also provides that the mechanical royalties formula for Spotifys ad-supported
service is illustrated below. Id. at p. 4 12 (citing 35 C.F.R. 385.12-13). Mr. Vogel continues,
[t]he formulas for mechanical royalties for Spotifys paid service is illustrated below. Id.
(citing 35 C.F.R. 385.12-13).
12
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(2) the Code of Federal Regulations12; (3) established case law (discussed herein); (4) Spotifys
own licensing practices13; (5) statements by Spotifys agent and administrator, the Harry Fox
Agency (discussed below); (6) consensus among those in the industry (discussed below); and (7)
logic, given that Spotify has recently settled two claims based upon its failure to obtain and
maintain appropriate licenses, including the Ferrick class settlement repeatedly referenced in
While Plaintiff doubts that Defendant or its sophisticated counsel need an overview of
copyright law, copyright owners may authorize others to exploit their exclusive rights under the
Copyright Act, including the right to reproduce the work (e.g., make multiple copies of sheet
music or multiple copies of digital files) (17 U.S.C. 106(1)) . . . the right to distribute copies of
the work to the public by sale or rental (e.g., sell copies of sheet music in stores, sell copies of
digital files on iTunes or Google Play, or distribute temporary server copies via certain
streaming services such as Spotify) (17 U.S.C. 106(3)) . . . In the context of music publishing,
the combination of reproduction and distribution rights is known as a mechanical right. (See,
e.g., Exhibit E, Congressional Research Service (CRS) Reports, Money for Something: Music
12
Subpart B of the Code of Federal Regulations 385 establishes rates and terms of royalty
payments for interactive streams and limited downloads of musical works by subscription and
nonsubscription digital music services in accordance with the provisions of 17 U.S.C. 115.
385.10(a). Spotify, [a] licensee that, pursuant to 17 U.S.C. 115, makes or authorizes interactive
streams or limited downloads of musical works . . . shall comply with the requirements of [17
U.S.C. 115]. 385.10(b).
13
Spotifys license agreement with, at least some, publishers provides that Spotify will pay
Publisher the mechanical rates set forth under the compulsory license provision of Section 115 of
the United States Copyright Act. (See, e.g., Exhibit D, License Agreement at 3.1(i)). The grant
of license in this particular license agreement, which Spotify drafted, provides Spotify a
nonexclusive license to use, transmit, perform, reproduce, and deliver, through to the end user,
the Musical Works contained in Publishers Catalog via delivery of On-Demand Streams and
Limited Downloads, inclusive of all rights required in connection therewith, for all activities of
Licensee that fall within the scope of Section 115 of the United States Copyright Act . . . (See,
e.g., Exhibit D, License Agreement at 2.1). The license agreement repeatedly references
Section 115 of the Copyright Act, and Spotifys obligations thereunder.
13
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Licensing in the 21st Century, CRS Report No. R43984 at p. 2 (May 7, 2015)) (emphasis added).
Musical compositions are subject to the compulsory licensing scheme set forth in Section 115 of
the Copyright Act, under which mechanical licenses are conferred upon payment of a set
royalty rate. See 17 U.S.C. 115; Rodgers & Hammerstein Org. v. UMG Recordings, Inc., No.
00 Civ. 9322(JSM), 2001 U.S. Dist. LEXIS 16111, at *4 (S.D.N.Y. Sept. 26, 2001); 6 Nimmer
requirements, Section 115 also allows copyright owners and aspiring licensees to directly
negotiate the terms and rate of royalty payments. See UMG Recordings, 2001 U.S. Dist. LEXIS
16111, at *4. As set forth in detail in Plaintiffs Complaint (see, e.g., DI 1 at 4, 22, 23, 33-37;
58-61; 62; 65-66, 68, 72, 74-75), Spotify must obtain and maintain such mechanical licenses in
This is consistent with statements from The Harry Fox Agency, Spotifys agent and
administrator, which provides on its website: If you want to record and distribute a song that
you dont own or control, or if your business requires the distribution of music that was written
by others, you need a mechanical license. Harry Fox Agency, What Type of License Do I
mechanical license grants the rights to reproduce and distribute copyrighted musical
interactive streams and other digital configurations supporting various business models,
including locker-based music services and bundled music offerings. If you want to record and
distribute a song that you dont own or control, or if your business requires the distribution of
music that was written by others, you need to obtain a mechanical license. Harry Fox Agency,
14
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https://www.harryfox.com/license_music/what_is_mechanical_license.html (emphasis added).
If you are manufacturing and distributing copies of a song that you do not own or control, you
need to obtain a mechanical license. This is required by the U.S. Copyright Act, regardless of
whether or not you are selling the copies that you make. Under the U.S. Copyright Act, the right
to use copyrighted, non-dramatic musical works in the making of sound recordings, including
CDs, records, tapes, ringtones, permanent digital downloads, and other digital formats (e.g.,
interactive streams) for distribution to the public for private use is the exclusive right of the
copyright owner. Harry Fox Agency, Why do I Need a Mechanical License?, available at
It is important to note that under the plain language of the United States Copyright Act,
Spotifys use would qualify as a digital phonorecord delivery. The United States Copyright
Act provides:
17 U.S.C. 115(d). Spotify allows users to select which songs they want to hear, and, as such,
14
See, e.g., ARTICLE: PANDORA & SPOTIFY: LEGAL ISSUES AND LICENSING
REQUIREMENTS FOR INTERACTIVE AND NON-INTERACTIVE INTERNET RADIO
BROADCASTERS, 54 IDEA 23, 46-47 (For its offline and interactive streaming services,
Spotify has to consider not only performance rights, but also copyright holders' exclusive
distribution and reproduction rights, as provided for in 106(1) and (3) of the Copyright Act,
respectively. . . . First, Spotify has to obtain licenses to perform both the musical work and the
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The right to play the musical composition is referred to as the "public
performance right," while the right to reproduce and distribute musical
compositions embodied in sound recordings is commonly referred to as the
"mechanical right." It is the "mechanical right" in the musical works listed in
the Complaint that is at issue here. More specifically, it is the copyright holders'
mechanical rights in "limited downloads" and "on-demand streams" of the
musical compositions embodied in sound recordings referenced in the
Complaint that are at issue. Permission to reproduce and distribute copyrighted
works in these formats may be obtained by voluntary license i.e., with the
consent of the copyright holder or by compulsory license, pursuant to 17
U.S.C. 115.
Appalseed Prods., Inc. v. Medianet Dig., Inc., 2012 U.S. Dist. LEXIS 93946, at *5-6 (S.D.N.Y.
July 6, 2012) (emphasis added) (noting in footnote 5, the Copyright Royalty Board finalized
royalty rates for mechanical licenses for limited downloads and on-demand streams).
It is clear that mechanical licenses are required to engage in the process of interactive
streaming, and the industry has reached a consensus on this topic. What Spotify is (rather
casually) proposing in its 12(e) Motion would not just be directly contrary to settled law and
Spotifys admissions and practice, but settled industry practice. For example, the Recording
Industry Association of America, Inc. commented before the United States Copyright Office:
Over the course of the last eight years a consensus has slowly emerged among the
most affected parties as to what types of licenses different kinds of services need
in order to operate. This consensus is reflected in the licensing practices of
individual companies as well as in agreements reflecting discussions among
representatives of the affected industries. As noted in the NPRM, 73 Fed. Reg. at
40,805, RIAA, NMPA and The Harry Fox Agency notified the Office of the first
such agreement in 2001. RIAA and NMPA have recently reached a similar
agreement with the Digital Media Association. It thus is accepted by all those
sound recording. Like Pandora, it generally obtains blanket licenses from PROs for the
performance of the musical works. However, unlike Pandora, Spotify is not entitled to statutory
licensing under 114 of the Copyright Act, since it is an interactive service. Section
114(d)(3)(C) of the Copyright Act provides that an interactive service must obtain the copyright
from a sound recording performance rights society or from the copyright holder. . . . Second, in
order to lawfully and interactively stream songs, Spotify has to acquire mechanical licenses for
musical works. This is proscribed under 115 of the Copyright Act, which establishes a
compulsory licensing scheme for copying and distributing phonorecords to which the musical
works are fixed.) (emphasis added).
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entities that under current law . . . licenses from copyright owners of musical
works are required under 17 U.S.C. 115 to engage in the process of interactive
streaming, including the making and/or transmission of server, cached, network
and RAM buffer copies necessary to engage in such activity.
(Exhibit F, Comments of the Recording Industry Association of America, Inc. before the
Copyright Office dated August 28, 2008 at p. 3) (emphasis added). Defendants current Motion,
unsurprisingly, caught the attention of a number of those in the music industry due to
Defendants assertion that Spotify does not need mechanical licenses to exploit the musical
compositions embodied in the sound recordings it offers through its interactive streaming
service. For example, David Israelite, President and CEO of the National Music Publishers
has been a settled legal issue for over 10 years: in two previous legal settlements; in the Section
115 regulations; in legal filings of the parties in the CRB [Copyright Royalty Board]; in the
business practices of all interactive streamers. . . . While I am aware that defendants in lawsuits
will throw up all kinds of crazy defenses, this is a road down which Spotify does not want to
travel. (Exhibit G, Billboard, Spotify, Bluewater & Mechanical Licensing: Whats Really
Driving the Streaming Giants Latest Legal Fight, September 5, 2017; see also Exhibit H,
Digital Music News, The Worlds Largest Music Publishers Just Declared War on Spotify In
No Uncertain Terms, September 6, 2017 (Last week, Spotifys attorneys decided that the
reproductive mechanical license doesnt apply to streaming services. But thats definitely the
the statutory requirements provided for in Section 115. Plaintiffs Complaint also provides that a
copyright owner or co-owner has a right to terminate Section 115 licenses should a licensee not
live up to its statutorily prescribed obligations. See also 17 U.S.C. 115(c)(6) (Such
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termination renders either the making or the distribution, or both, of all phonorecords for which
the royalty has not been paid, actionable as acts of infringement under section 501 and fully
subject to the remedies provided by sections 502 through 506.); EMI Entmt World, Inc. v.
provides:
If the copyright owner fails to receive from the compulsory licensee the monthly
payment of royalties, or the monthly or annual statements of account when due,
the owner may give written notice to the licensee that, unless default is remedied
within thirty days from the date of the notice, the compulsory license will be
automatically terminated. Upon such termination, the making and distribution of
all phonorecords for which a royalty has not been paid will be considered acts of
infringement, as if no compulsory license had ever been obtained. In that event,
those who made and those who distributed the phonorecords will be jointly and
severally liable as infringers, whether or not they were, as such, the compulsory
licensees.
Spotify offers through its interactive streaming service when it allowed users on its interactive
streaming service to listen upon request and/or download the compositions at issue, despite the
fact that Spotify lacked the necessary and statutorily prescribed mechanical licenses. This is the
crux of Plaintiffs argument, and was clearly set forth in Plaintiffs Complaint. Defendants own
(By offering access to a very large licensed library of content, available for streaming on
demand, Spotify makes music available at a price and in a format that people like.)) (emphasis
added). However, it should go without saying, whether or not Spotifys service is user friendly or
affordable to the consumer is not at issue in this case, rather the focus of this action is whether
Spotify obtained and maintained the licenses required to lawfully exploit the musical
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compositions at issue in this case. If not, Spotify actions with respect to such musical
Spotify (but ignored) and other facts set forth in Plaintiffs Complaint, is best described as willful
copyright infringement.
2. As Defendant Knows Full Well, the United States Copyright Act and Established Case
Law Clearly Distinguish Spotifys Interactive Streaming Service from the Non-
Interactive Services in the Case Law Cited in Defendants Motion.
Defendant also asserts in its Motion that streaming by its very definition cannot
infringe upon either the reproduction right under 17 U.S.C. 106(1) or the distribution right
under 17 U.S.C. 106(3). (DI 29 at 2) (emphasis in original). This assertion, of course, ignores
the fact that Plaintiffs Complaint repeatedly refers to Spotify as an interactive streaming
service. (DI 1 at 15, 23, 28, 33, 34). Defendant then cites numerous inapposite cases and
other sources ostensibly attempting to compare Spotifys interactive service with the non-
interactive services discussed in the cited cases and sources. (DI 29 at 6-7). As Defendant is fully
aware, and as discussed below, this is not an apt comparison. What Defendant inexplicably fails
15
In its Motion, Defendant, on its way to a multi-billion dollar initial public offering, had the
audacity to raise the issue of fair use as a potential defense. In determining whether the use of
a copyrighted work is fair, we consider: (1) the purpose and character of the use, including
whether such use is of a commercial nature or is for nonprofit educational purposes (commercial
use weighs against fair use); (2) the nature of the copyrighted work (finding that the exploited
work(s) are creative and published weighs against fair use); (3) the amount and substantiality of
the portion used in relation to the copyrighted work as a whole (wholesale copying weighs
against fair use); and (4) the effect of the use upon the potential market for or value of the
copyrighted work (adverse affect on potential market weighs against fair use). See, e.g., Reiner v.
Nishimori, No. 3:15-cv-00241, 2017 U.S. Dist. LEXIS 65070, at *17 (M.D. Tenn. Apr. 28, 2017)
(citing 17 U.S.C. 107). Applying these factors to Spotifys actions in this case: (1) Spotifys
exploitations of the musical compositions at issue is unquestionably commercial; (2) the musical
compositions at issue are creative and published; (3) Spotifys actions evidence wholesale
copying of the musical compositions at issue; and (4) Spotifys wholesale distribution of the
musical compositions at issue to consumers for free through its interactive streaming service
negatively affects the songwriter(s) and/or music publisher(s) ability to monetize the same.
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interactive streaming under the law, including by the very case law and other authorities that
streaming services:
In re Pandora Media, Inc., 6 F. Supp. 3d 317, 332 (S.D.N.Y. 2014); see also 17 U.S.C.
114(j)(7) (If an entity offers both interactive and noninteractive services (either concurrently or
at different times), the noninteractive component shall not be treated as part of an interactive
service.).
Interactive services are defined as those which transmit[] and/or provide[] access to
In re Pandora Media, Inc., 6 F. Supp. 3d 317, 330 n.27 (S.D.N.Y. 2014). Interactive services, in
contrast to satellite radio and preexisting subscription services, allow an end user to hear a
particular song on demand, and do not benefit from a compulsory license. Music Choice v.
Copyright Royalty Bd., 413 U.S. App. D.C. 312, 317, 774 F.3d 1000, 1005 (2014) (citing 17
It is telling, and clearly intentional, that Defendant only cites authority relating to
Pandora, Sirius XM Radio, and other non-interactive services, rather than interactive services
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such as Spotify. Numerous courts and other sources have specifically noted the distinction
between Spotifys interactive streaming service and other non-interactive services. See, e.g.,
Broad. Music, Inc. v. Pandora Media, Inc., 140 F. Supp. 3d 267, 289 (S.D.N.Y. 2015) (Nor is
Pandora directly comparable to on-demand services such as Spotify, because Pandora listeners
cannot select specific songs.) (emphasis added); In re Pandora Media, Inc., 6 F. Supp. 3d 317,
329 (S.D.N.Y. 2014) (But, while programmed radio and customized radio are Pandora's
primary competition, Pandora also competes with interactive, on-demand internet music
services. Its identified competitors in this market include Apple's iTunes Store, RDIO,
Rhapsody, Spotify, and Amazon.); see also ARTICLE: PANDORA & SPOTIFY: LEGAL
between Spotify and Pandora is that Spotify is a so-called interactive service, which explains
While Pandora (or the other non-interactive services cited by Spotify in its Motion) may
be able to get by on public performance licenses alone, the same cannot be said of Spotify and its
interactive streaming service.16 Once this distinction is taken into account, one need not look
16
(See, e.g., Exhibit C, Congressional Research Service (CRS) Reports, Money for Something:
Music Licensing in the 21st Century, CRS Report No. R4398 at p. 3 (May 7, 2015)) (Users of
an on demand, or interactive digital radio service (e.g., Spotifys free and subscription
services and the Vevo music video website) can listen to songs upon request, thereby
experiencing a hybrid of playing a CD and listening to a radio broadcast. To enable multiple
listeners to select songs, the service makes temporary reproductions of digital files on servers. It
pays both reproduction royalties and performance royalties to music publishers/songwriters
and to record labels/artists.) (emphasis added); see also ARTICLE: PANDORA & SPOTIFY:
LEGAL ISSUES AND LICENSING REQUIREMENTS FOR INTERACTIVE AND NON-
INTERACTIVE INTERNET RADIO BROADCASTERS, 54 IDEA 23, 25 (The differences in
licensing requirements flow from the different services Spotify and Pandora provide. While
Pandora is a so-called non-interactive service and has to deal with fewer licenses, Spotify's on-
demand streaming qualities make it an interactive service, which means it also has to take
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further than the very case law cited by Defendant to realize where Defendants argument falls
apart: The right of distribution under section 106(3) is expressly subject to section 115, which
allows a person who obtains a compulsory license to make and distribute phonorecords of the
work. Deacon v. Pandora Media, Inc., 901 F. Supp. 2d 1166, 1175 (N.D. Cal. 2012) (citing 17
For example, Defendant cites Flo & Eddie Inc. v. Sirius XM Radio Inc., No. CV 13-5693
(PSG) (RZX), 2014 U.S. Dist. LEXIS 139053, at *19 (C.D. Cal. Sept. 22, 2014), for the
proposition that: If a service enables users to download a song, then that service engages in the
reproduction and distribution of a sound recording and of the musical composition that sound
recording embodies. . . . But if the service streams a song, then the stream is an isolated public
performance of a sound recording, and of the musical composition that sound recording
embodies. (DI 29 at 6). This citation is inexcusably misleading in at least three ways.
with Sirius XM Radios non-interactive streaming service. Second, as far as Plaintiff can tell, the
Flo & Eddie Inc. opinion cited by Defendant does not even address the issue Defendant is citing
it for, i.e., presumably, whether Spotifys actions (i.e., its interactive streaming service)
constitute a reproduction and/or distribution of the musical compositions at issue. A more apt
To that end, while I agree with the conclusion of my colleagues in the majority
that the common law of this state does not recognize a right of public
performance, I would answer the pertinent part of the certified question in the
negative with this caveat: public performance does not include the act of
allowing members of the public to receive the on-demand transmission of
particular sound recordings specifically selected by those listeners.
into consideration other licensing rights in addition to the mere performance of a song, such
as distribution and reproduction rights.) (emphasis added).
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Flo & Eddie, Inc. v. Sirius XM Radio, Inc., 2016 NY Slip Op 08480, 16, 28 N.Y.3d 583, 611-
12, 48 N.Y.S.3d 269, 286, 70 N.E.3d 936, 953 (Fahey, J. (concurring)) (emphasis added). Third,
Defendant notes that a download (as distinguished from a stream) is a reproduction and
distribution of the musical composition that a sound recording embodies, but fails to mention
that Spotify allows its users to download specific songs. On Spotifys website, Spotify urges
consumers, With Spotify Premium, you can download music so its available everywhere you
a non-interactive streaming service, citing to Flo & Eddie Inc. for a proposition it does not
support, and inappropriately comparing its interactive streaming service to a public performance,
Defendant fails to mention that Spotifys interactive service also allows users to download music
as well (i.e., the very thing Spotify is seemingly attempting to distinguish itself from). It is clear
that Spotify needs a mechanical license to offer plaintiffs' songs . . . because that service
provides a feature where a user can download a song for offline playback, which creates a fixed
copy, considered to be a phonorecord, of the song on the user's device. See, e.g., Yesh Music,
LLC v. Amazon.com., Inc., 2017 U.S. Dist. LEXIS 54417, at *5 (E.D.N.Y. Apr. 8, 2017)
(citations omitted).
Next, Defendant cites Deacon v. Pandora Media, Inc., 901 F. Supp. 2d 1166, 1175 (N.D.
Cal. 2012), for a similar proposition, namely the right to publicly perform or stream a
copyrighted sound recording is different from copyright holders right to distribute copies of the
copyrighted work to the public. (DI 29 at 6). Defendants citation to Deacon v. Pandora Media,
Inc. contains the same glaring, and misleading, error as the above citation to the extent that
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Defendant suggests Spotifys interactive streaming service (which also allows users to listen to
songs upon request and/or download music) is analogous to Pandoras non-interactive streaming
service. It is not.
C. Defendant Has Made Clear From the Beginning that it is Willing to Vexatiously
Multiply the Proceedings.
Defendants Motion is purely tactical. Defendant almost assuredly knew that its Motion
lacked merit, and would ultimately be denied. Nevertheless, Defendant proceeded to file a
Motion claiming to seek a more definite statement from Plaintiff. If Defendant wants a clear
statement of Plaintiffs allegations against Spotify, Defendant need not look further than
Plaintiffs Complaint. (See, e.g., DI 1 at 4, 22, 23, 62, 65-66, 68, 72, 74-75). Defendant
2016 U.S. Dist. LEXIS 96919, at *7. It is not. Furthermore, and more troubling, Defendants
attempt to mischaracterize the law by implying (if not expressly stating) that Spotifyan
interactive streaming service which allows its users to both select and stream songs on-demand
and/or download songsforgoes the need for mechanical licenses by entering into public
performance licenses. (DI 29 at 6-7). Such an assertion is, as Defendant knows, meritless.
wrongdoing, delay the inevitable, and make the litigation of this case as hard on Plaintiff as
possible. Defendants Motion is truly the epitome of a vexatious pleading that improperly
multiplies the proceedings, and wastes the Courts judicial resources. Given the utter lack of
support for Defendants Motion, and the ulterior motive behind its filing, Plaintiff asks the Court
to award sanctions pursuant to 28 U.S.C. 1927 in order to cover the excess costs, expenses, and
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respectfully requests the Court to consider exercising its inherent power to sanction Defendant
for filing yet another frivolous motion. "The Sixth Circuit has imposed three conditions for
imposing sanctions under the Court's inherent authority: (1) the litigant's claims are meritless, (2)
the litigant knew or should have known his claims were meritless, and (3) his claims were filed
3:07-CV-187, 2007 U.S. Dist. LEXIS 39898, at *22 (E.D. Tenn. May 30, 2007) (citing First
Bank of Marietta v. Hartford Underwriters Ins. Co., 307 F.3d 501, 512, 516 (6th Cir. 2002)). As
discussed throughout this Opposition, each is applicable here. "Pursuant to its inherent powers, a
court in the Sixth Circuit may impose sanctions to curb vexatious, bad faith litigation." Id.
CONCLUSION
For the foregoing reasons, Plaintiff respectfully requests the Court summarily deny
Respectfully submitted,
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CERTIFICATE OF SERVICE
I hereby certify that on the 13th of September, 2017 I served the proceeding document by
filing it with the Courts ECF system which automatically delivered a copy to:
Samuel F. Miller
Baker Donelson
211 Commerce Street, Suite 800
Nashville, TN 37201
Jeffery E. Ostrow
Simpson Thacher & Bartlett LLP
2475 Hanover Street
Palo Alto, CA 94304
Christopher J. Sprigman
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
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