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Microsoft seemingly settles mechanicals lawsuit, as Google also targeted

By Chris Cooke | Published on Friday 4 March 2016

The musician who has sued Tidal over allegedly unpaid mechanical royalties has seemingly settled with Microsoft over the same issue. In fact, it seems that John Emanuele is aiming for a full set of mechanical royalty lawsuits, with litigation launched against Google Play and Slacker as well as Tidal and Microsoft. I think if you sue them all you possibly get a free set of whisky tumblers.

As previously reported, John Emanuele of The American Dollar and his publishing company Yesh Music sued Tidal earlier this week, claiming that the streaming service had either failed to pay or had underpaid mechanical royalties due on the streams of his music.

The core complaint in the lawsuit mirrors that in the legal actions being pursued by David Lowery and Melissa Ferrick against Spotify, ie that the streaming services failed to comply with the administrative requirements of the compulsory licence that covers the so called ‘mechanical rights’ in songs in the US, and therefore streamed those works without licence.

That is basically copyright infringement. So, rather than the nominal mechanical royalties the plaintiffs may or may not be due from Spotify, Tidal et al, all three musicians are suing for statutory damages, which could be as high as $150,000 per streamed song.

The Microsoft lawsuit, filed last November, was based on streams serviced by Xbox Music – or what is now Groove Music – and followed a similar line to that filed against Tidal, ie that when The American Dollar provided their music to Microsoft’s streaming platform via Tunecore, only the recording rights were cleared.

So the mechanical rights of the song copyright were not covered, and Microsoft was therefore obliged to either license those rights directly, or to comply with the terms of the compulsory licence, which requires the digital service to alert the copyright owner of its intent to stream their work.

As much previously noted, the licensing of mechanical rights in the US – which was handled by the record labels for both CDs and downloads Stateside – has long been inefficient, but has become a particularly big issue in the streaming domain, where the digital platform is the licensee.

The digital services argue that a lack of decent copyright data – in particular a database that states which song copyright is contained within any one recording – makes it impossible for them to file the paperwork required by the compulsory licence. There is some sympathy for that argument in the music publishing sector, though others say that the well-funded streaming firms should have done something to address this issue when they first launched in the American market.

Either way, while most streaming firms are so far fighting the mechanical rights lawsuits, Microsoft seemingly settled. Digital Music News has published a court filing from last month in which Yesh Music and Emanuele state that litigation against the IT giant was being “voluntarily dismissed with prejudice”. The terms of any settlement are not known.

Emanuele also sued Slacker Radio on the mechanicals issue last month. Although, best known as a personalised radio service – which, under copyright conventions in the US, would only have to license the ‘performing rights’ in songs, not the mechanical rights – Slacker does offer a fully on-demand option. Meanwhile new legal action against Google Play was filed on Tuesday.

Quite how all this is going to turn out still remains to be seen, though I think we can now officially called the whole mechanical rights situation in the US a “shitstorm”.