A federal judge refused to fast-track The MLC’s appeal, but also struck Spotify’s unclean-hands defense in the ongoing royalty case.
Spotify kept a key win in its royalty fight with The Mechanical Licensing Collective, but the case is still far from over.
U.S. District Judge Analisa Torres ruled September 1 that The MLC cannot immediately appeal her earlier decision allowing Spotify to classify Premium music-and-audiobook subscriptions as “bundles.” At the same time, she granted The MLC’s request to strike Spotify’s “unclean hands” defense.
Spotify keeps the bundle ruling for now
The dispute began in May 2024, when The MLC sued Spotify over the way it reported Premium Individual, Duo and Family plans after adding audiobook access. The classification matters because federal mechanical royalty rules treat standalone music subscriptions differently from bundles. Spotify’s approach allows part of subscription revenue to be assigned to audiobooks before music royalties are calculated.
In January 2025, Torres sided with Spotify and found that Premium qualifies as a bundle because subscribers receive music plus another service: 15 hours of audiobook listening per month with “more than token value.”
The MLC asked to appeal that ruling before the rest of the case was resolved. Torres said no. She found the collective had not shown enough disagreement over the governing law to justify an interlocutory appeal. For now, Spotify’s core victory stays in place.
Spotify loses its unclean-hands defense
Spotify did not come away empty-handed, but it also lost a defense it had tried to use against The MLC. The company argued that the collective had selectively targeted Spotify while allegedly not pursuing other streaming services over similar reporting practices. Spotify said that amounted to “unclean hands,” an equitable defense that can block relief when a plaintiff’s own misconduct is tied to the dispute.
Torres rejected that argument. She found no legal requirement that The MLC enforce Section 115 against every streaming service “in the same way, the same manner, and at the same time.” The court said Spotify’s defense “has no basis in law” and ordered it stricken.
The royalty fight now turns to calculation
The case is still alive because the original dismissal did not end the litigation. The MLC later filed an amended complaint with different theories. Instead of only arguing that Spotify cannot call Premium a bundle, it now says Spotify improperly calculated the royalties owed on those bundles, including through the value assigned to the audiobook component.
That leaves the central issue narrower, but still expensive: Spotify has so far protected its right to treat music-plus-audiobooks as a bundle under federal royalty rules. What remains unresolved is whether it is calculating that bundle correctly, and paying the right amount of mechanical royalties to songwriters and publishers.
