Spotify is being sued in the US by a company called PacketVideo, which claims the service infringes on one of its patents.
If the lawsuit holds up, Spotify could face a ban in the US or be forced to cough up hefty licensing fees.
The claim has popped up a mere two weeks after Spotify launched in the US, with PacketVideo claiming that the Spotify is violating a patent is has for a "Device for the Distribution of Music in Digital Form" and says that it informed Spotify of the patent in May.
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Both the Luxembourg and UK divisions of Spotify have been brought into the complaints by the California court.
The big question is, might this case see Spotify face a permanent ban in the US unless it reaches an agreement with PacketVideo?
TechRadar has contacted both companies for further comment, and a Spotify rep gave us the following statement today:
"In just under three years, Spotify has become more popular than any other music service of its kind. This success is, in large part, due to our ownhighly innovative, proprietary hybrid technology that incorporates peer-to-peer technology.
"The result is what we humbly believe to be a better music experience - lightning fast, dead simple and really social.PacketVideo is claiming that by distributing music over the Internet, Spotify (and by inference any other similar digital music service) has infringed one of the patents that has previously been acquired by PacketVideo. Spotify is strongly contesting PacketVideo's claim."
No response to date from PacketVideo. But patent cases can rumble on over several years, so don't hold your breath for the definitive answer on what exactly is going on just yet.