The crux of the suit is as follows:
Under the Copyright Act, there are two separate copyrights to every recorded song: one for the sound recording (this revenue typically goes to the record label) and one for the musical composition (this revenue typically goes to the publisher and songwriter). The lawsuit alleges that Spotify took a “shortcut” and did not obtain the musical composition copyright for some 10,784 songs published by Wixen.
The lawsuit alleges that Spotify outsourced its copyright responsibility to a third party, Harry Fox Agency, which was “ill-equipped to obtain all the necessary mechanical licenses.” It also alleges that Spotify knew the agency “did not possess the infrastructure to obtain the required mechanical licenses,” that it knew it didn’t hold the licenses required to stream certain songs, and that it barreled ahead anyway.
Spotify did not respond to a request for comment.
Music licensing is notoriously complex, with each song having multiple rights holders who can be difficult to identify and locate. Unlike performance rights for musical compositions, which are typically administered through a handful of performing rights organizations, mechanical rights are not centrally administered and could belong to one of thousands of independent music publishers.
Wixen handles titles by Stevie Nicks, Neil Young, Tom Petty, the Doors, and Weezer’s Rivers Cuomo, among others. In its lawsuit, it said its songs have been downloaded or streamed billions of times through Spotify, and that it received no revenue for that.
The whole article is worth a read.