University of Georgia music business lecturer David Lowery filed a $150 million class-action lawsuit against Spotify Monday in U.S. District Court in Los Angeles, claiming the company knowingly and illegally distributes copyrighted music without obtaining necessary mechanical licenses. Lowery, who leads the bands Camper Van Beethoven and Cracker, claims the songs Spotify is illegally distributing include four Cracker songs -- “Almond Grove," "Get On Down the Road," "King of Bakersfield" and "Tonight I Cross the Border.” Spotify has distributed copyrighted music to more than 75 million users without properly obtaining needed mechanical licenses, Lowery said in the lawsuit. Spotify's publicly admitted failure to obtain the mechanical licenses “creates substantial harm and injury to the copyright holders, and diminishes the integrity of the works,” Lowery said in the lawsuit. “We are committed to paying songwriters and publishers every penny," a Spotify spokesman said in a statement. "Unfortunately, especially in the United States, the data necessary to confirm the appropriate rightsholders is often missing, wrong, or incomplete. When rightsholders are not immediately clear, we set aside the royalties we owe until we are able to confirm their identities.” Spotify is working “closely” with the National Music Publishers Association to “find the best way to correctly pay the royalties we have set aside and we are investing in the resources and technical expertise to build a comprehensive publishing administration system to solve this problem for good,” the spokesman said.

The Patent and Trademark Office's online systems have been restored after a "major power outage" last week shut down the agency's IT systems (see 1512230042), the PTO said in a blog post Monday. Customers are able to use the PTO's online systems to search for and file items and to make payments, the blog post said, but because of work needed to repair and stabilize the power supply and hardware, "it is possible that some or all systems may need to be taken offline again." Online systems "may come and go without notice," the PTO said, and the agency will "keep deadline flexibility in mind" based upon the "results and the stability of [its] operations."

The Copyright Office said it's planning a study of implementation of Digital Millennium Copyright Act (DMCA) Section 1201, including the CO's triennial rulemaking process for granting exemptions to Section 1201's ban on circumvention of technological protection measures. The Library of Congress granted 10 CO-recommended exemptions to Section 1201 in October, prompting some stakeholders to renew their calls for Congress to place limits on what they believe is DMCA's expanding scope (see 1510270056). The CO is also doing a separate study on what provisions in existing U.S. copyright laws are implicated by the spread of software in everyday products and whether those laws affect innovation in the use of software in products (see 1512150050). The CO's planned study will also examine the existing permanent exemptions to Section 1201, the law's anti-trafficking provisions and other Section 1201-related consumer issues, the office said in a notice set to appear in Tuesday's Federal Register. The current triennial Section 1201 exemptions review process “is resource-intensive for both participants and the Office,” the CO said Monday. The office is considering adjusting the triennial process to allow for presumptive renewal of previously granted exemptions “when there is no meaningful opposition to renewal.” The requirement that previously granted exemptions be re-evaluated during each triennial process is “an area of particular concern" given that several of the exemptions granted in October were essentially the same as exemptions granted during the 2012 triennial review, the CO said. The office said it's seeking comment on its proposed study, including whether the office should consider other Section 1201 provisions in its review. Comments are due Feb. 25 and reply comments are due March 25. The CO said it also plans at least one public meeting to gather additional comments after the comment deadlines lapse.

A “major power outage” Tuesday night at Patent and Trademark Office headquarters in Washington “damaged equipment that required the subsequent shutdown of many of our online and IT systems,” the agency said in a message posted Wednesday at the top of its home page. The outage and secondary damage knocked out “our filing, searching, and payment systems, as well as the systems our examiners across the country use,” PTO said. “We are working diligently to assess the operational impact on all our systems and to determine how soon they can be safely brought back into service.” The agency will give “status updates” on its systems alert page “as they become available,” and on its Facebook and Twitter accounts, it said. At 1 p.m. EST Wednesday, a systems alert page update reported that "the impacts may be felt through the Christmas holiday."

Pandora signed separate multiyear licensing agreements with the American Society of Composers, Authors and Publishers and Broadcast Music Inc., that will benefit Pandora while “modernizing compensation in the U.S. for ASCAP and BMI songwriters and publishers," it said Tuesday. In the BMI agreement, Pandora agreed to withdraw its appeal of the May order in a recent BMI rate case (see 1505150039). ASCAP CEO Elizabeth Matthews called the agreement “good news for music fans and music creators” and “a sign of progress” in the push for better streaming payments for songwriters, composers and music publishers. BMI’s agreement with Pandora is “comparable to the other direct deals in the marketplace, but it also allows us to amicably conclude our lengthy rate court litigation and focus on what drives each of our businesses -- the music,” said BMI CEO Mike O’Neill. Pandora CEO Brian McAndrews said the company’s agreements with performing rights organizations and direct deals with music publishers demonstrate the company's "progress in working together to grow the music ecosystem.” Terms weren't disclosed, but the parties said they allow ASCAP and BMI to deliver improved performance royalties for songwriters and publishers, while Pandora will benefit from more rate certainty and the ability to add flexibility to its product offering over time. The public performance royalties Pandora pays to rights holders of master recordings aren't affected by the agreements.

Several industry groups praised introduction of the Copyright Office for the Digital Economy (CODE) Act (HR-4241) in statements Monday and Tuesday. The bill would separate the CO from the Library of Congress but keep it within the legislative branch. HR-4241 also would require the CO director to regularly study whether the office's IT systems were meeting the copyright community's needs (see 1512140029). The MPAA said it believes HR-4241 advances “the conversation on [CO] modernization. The importance of copyright to our culture and our economy demands a more autonomous [CO] that has the flexibility it needs to serve copyright owners and users.” Newspaper Association of America President David Chavern said he hopes HR-4241 will address “troubling aspects” in the copyright registration process, like the CO's current requirement that print newspapers register copyright by submitting content in microfilm format. “This is grossly out of touch with today's technology,” Chavern said in a news release.

Pandora and Warner/Chappell Music signed a multiyear licensing agreement covering Warner/Chappell's entire catalog. Specific terms of the licensing agreement remain confidential, but the deal means Warner/Chappell can “obtain its goal of delivering improved performance royalties for its songwriters, while Pandora will benefit from greater rate certainty,” Pandora said Tuesday in a news release.

The Copyright Office seeks comment by Feb. 16 on what provisions​ in existing U.S. copyright law “are implicated by the ubiquity of software in everyday products, and the effect of copyright law on technological advancements in such products.” Reply comments are due March 18, the CO said in Tuesday's Federal Register. The CO said it's doing the study in response to a request from Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, and ranking member Patrick Leahy, D-Vt. They sought the study in October, days before the CO and Library of Congress released 10 exemptions to Digital Millennium Copyright Act Section 1201 (see 1510230036). Topics the CO wants to study include whether the application of copyright law to software in everyday products “enables or frustrates innovation and creativity in the design, distribution and legitimate uses of new products and innovative services,” the office said. The CO said it's also seeking information on whether legitimate business models for copyright owners “could be improved or undermined by changes to copyright law in this area.” The study isn't “intended to examine or address more general questions about software and copyright protection,” the CO said.

The Patent and Trademark Office Tuesday released its FY 2015 performance and accountability report (PAR), which detailed the agency's financial and performance measurement results and compared them to the previous fiscal year's. The PTO finished FY 15, which ended Sept. 30, 2.7 percentage points, or $76,615, ahead of its FY 2014 amount in total assets, and increased total earned revenue by 1.9 percentage points to $3.07 million, the report said. The agency also increased its federal personnel in FY 15 by 217 employees. In its performance measurements, the PTO didn't meet its target goal of a 16.4-month average first-action patent pendency, finishing with an average of 17.3 months, or its goal of a 83-91 patent quality composite score -- finishing FY15 with a score of 42.9. The PTO also failed to meet its goal of training 6,300 foreign government officials on best practices to protect and enforce intellectual property, it said. The PTO met or exceeded several of its target objectives, including average total patent pendency, average first-action trademark pendency, total average trademark pendency and exceptional office action, the report said. "While the PAR is a record of our achievements, it is also an honest discussion of the challenges we face as an agency moving forward in FY 2016," PTO Chief Financial Officer Tony Scardino said in a blog post Tuesday. Scardino said the PTO will continue efforts in the current fiscal year in managing the transition to a "steady-state operation" as the patent activity comes closer to achieving its pendency and inventory targets and establishing an Office of the Deputy Commissioner.

The Copyright Royalty Board will issue its ruling on the webcasting rate-setting proceeding Wednesday, the Copyright Office said Monday. The ruling, which will decide the statutory royalty rates that Pandora and other noninteractive online radio services will pay between 2016 and 2020, has been difficult for stakeholders to predict given the wide range of proposed rates and few clear signs from stakeholders’ interactions with the CRB (see 1512110064). The CRB will post the royalty rates online Wednesday but will initially send its full written determination only to parties that participated in the proceeding and Register of Copyrights Maria Pallante pending determination of what information the CRB will redact for public release, the CO said. The rates set will take effect Jan. 1.