The war of words between rival lyric aggregators LyricFind and Musixmatch continues. Last month LyricFind, which is suing its rival over alleged anticompetitive conduct, said Musixmatch was “grasping at straws” in its bid to get the lawsuit dismissed. Having now made another filing with the court demanding dismissal, Musixmatch says, “LyricFind is relying on bluster to distract from its business failures”.
LyricFind alleges that Musixmatch pressured music publisher Warner Chappell into an exclusivity deal around its lyrics in order to scupper LyricFind’s active bid to become Spotify’s lyric provider. A move which - it argues - violates US competition law.
But in its latest statement, Musixmatch says that rightsholders and streaming services “have a choice about whom they do business with and we’re proud that our partners continue to choose us”. Which means LyricFind has filed a meritless lawsuit just because “it failed to secure rights and win a contract”.
Both Musixmatch and LyricFind provide digital platforms with lyrics that they have aggregated and licensed from the music industry. Traditionally in the lyrics business, competing aggregators have all licensed the same lyrics from the same publishers, and then competed with each other on service provision and price.
Therefore, Musixmatch’s exclusivity deal with the Warner publisher was unusual. LyricFind says that a key motivation for that exclusivity deal was to stop it from being able to provide any Warner-controlled lyrics to its clients, making its offer much less attractive. Not least because LyricFind was bidding to take over as lyric provider to Musixmatch’s most important customer, Spotify.
Musixmatch argues that LyricFind has failed to demonstrate that its Warner deal violates any competition laws. That said, its primary argument for having the lawsuit dismissed actually relates to jurisdiction. LyricFind has filed its lawsuit in California, but LyricFind itself is a Canadian company, Musixmatch is Italian, and the Warner deal was with the publisher’s UK division.
In its most recent legal filing, LyricFind presented various arguments for why - despite those facts - the courts in California still have jurisdiction over this dispute. It stressed that Musixmatch, Warner Chappell and the big streaming services all have key operations and staff in the US market, plus the US is “the epicenter of the lyric-services industry”.
Countering those arguments in its new filing, Musixmatch takes particular aim at the “epicenter” argument, claiming that - if allowed to stand - that argument could be used to claim that the California courts have jurisdiction over any and every corporate dispute, because the US economy is so dominant in general.
If the “epicenter” argument can be employed here, it writes, “there would be no limits to the court’s ability to exercise personal jurisdiction over foreign defendants”. Because any aggrieved company in the world “could plausibly allege that the United States, the world’s largest economy, is the ‘epicenter’ of whatever industry is relevant to their case, and thus establish jurisdiction”.
Although Musixmatch reckons that its jurisdiction arguments alone should be enough for the judge to dismiss this case, its court filings do also respond to some of LyricFinds competition law claims. Which, it insists, “fare no better”.
First and foremost, it says that its specific Warner deal has not directly caused LyricFind any harm, because Warner was within its rights to stop licensing its lyrics to LyricFind for any number of reasons and could have done so at any time. For example, it could have entered into an exclusivity deal with a different aggregator or just decided it didn’t want to work with LyricFind anymore.
According to the new court filing, LyricFind has not shown or even really alleged that Warner Chappell “would have continued, or should be forced to continue, to allow LyricFind to sublicense and supply data services for its copyrighted material”, oblivious of any deal done with Musixmatch.
And so the back and forth continues. While it’s not clear what the judge will make of all these arguments, it’s pretty certain LyricFind will respond in due course with some pretty scathing remarks.