Just weeks after launching in the U.S., Spotify has fallen victim to a uniquely American phenomenon: an out-of-the-blue patent infringement lawsuit. A corporate decedent of PacketVideo, a forgotten mobile video streaming platform, filed the lawsuit over U.S.Patent 5,636,276: “Device for the distribution of music information in digital form”. If that's sounds vague, it's just like thousands of other patent U.S. lawsuits filed in recent years.  More plus Full Court Filing:

"When this patent was filed in 1995, this was not a unique idea," points out Techdirt. "You could have asked any semi-competent engineer how would you build a digital music streaming service, and you would have received a similar general explanation... The difficulty at the time was getting enough bandwidth to do this reasonably... and getting any sort of licensing in an era before most label execs even knew what the internet was."

On the surface at least, it would appear that Spotify won't be stopped by the lawsuit. But it serves as yet another example of how dysfunctional the U.S. Patent system has become; and the costs - both to Spotify and in court costs - will ultimately be paid by the consumer.
PacketVideo v. Spotify et. al.