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Peloton’s countersuit against the music publishers dismissed

By | Published on Thursday 30 January 2020


A US judge has dismissed the anti-trust lawsuit filed by fitness firm Peloton as part of its ongoing battle with various American music publishers.

More than a dozen independent publishers sued Peloton last year accusing it of making use of their songs without licence. Peloton makes fitness machines that come with screens via which users can access workout videos. The lawsuit alleged that some of those videos contained unlicensed music controlled by the plaintiffs.

Peloton then countersued mainly on competition law grounds. It alleged that it had previously had good relationships with most of the publishers involved in the legal dispute and was negotiating licensing deals with many of them. Those relationships only fell apart, it then claimed, because of interference by America’s National Music Publishers Association.

In an additional legal filing in October, Peloton summarised its case as follows: “Why are we here? Because of the anti-competitive and tortious conduct of the counterclaim defendant National Music Publishers’ Association. Specifically, NMPA has instigated a co-ordinated effort with the counterclaim defendant music publishers to fix prices and to engage in a concerted refusal to deal with Peloton”.

For their part, the publishers were disparaging of Peloton’s claims from the off, reckoning that – unable to counter their copyright infringement allegations – the fitness company was desperately trying to construct a phoney competition law complaint instead.

Subsequent legal filings from the publishers also referenced the so called Noerr-Pennington doctrine under US law, which basically allows competing businesses to collude for the purposes of lobbying or litigation.

They said: “It is settled law that the very conduct identified as the basis for Peloton’s claim – the publishers’ filing of the copyright infringement lawsuit and any alleged joint refusal to license incidental to that lawsuit – is shielded from antitrust liability by the Noerr-Pennington doctrine. Any other conclusion would render Noerr-Pennington meaningless”.

Granting the publishers’ motion to dismiss Peloton’s competition law litigation, the judge hearing the case noted in particular that, while a number of publishers may have come together to pursue a copyright infringement action, there was still plenty of other songs the fitness company could use that are controlled by other entities.

So even with the NMPA-organised legal action, there’s still plenty of competition in the market that Peloton is doing business with.

The judge said: “Peloton does not explain why it cannot substitute songs with sync licences owned by the music publishers [involved in the lawsuit] for songs with sync licences owned by other publishers. Indeed, as Peloton admits, it has successfully ‘collaborated with music publishers to develop an innovative [sync] licensing framework that is appropriate for its business and reached agreements with all the ‘major’ music publishers and many independent music publishers'”.

The judge then notes Peloton’s argument that things aren’t that simple because every song has “nonfungible qualities”, which means different songs are not easily interchangeable. But that’s not relevant said the judge. “It is true that every copyrighted work has at least some modicum of originality. But, recognition of that fundamental tenet of copyright law does not explain why songs not controlled by the music publishers cannot substitute in exercise programming for songs they do control”.

Needless to say, the National Music Publishers Association welcomed the ruling. It’s boss, David Israelite, said: “Today’s victory is a reminder that tech companies like Peloton cannot build businesses that are reliant on songwriters without asking their permission and paying them”.

“[The judge] has dismissed all of Peloton’s counterclaims”, he went on, “which were only meant to distract from their failure to license 2468 songs. We are pleased that Peloton’s attempts to divert attention from the heart of the issue – properly paying creators for the music on which its billion-dollar business was built – have been defeated”.

A Peloton spokesperson said they “respectively disagreed” with the court and were now considering their options for an appeal.