Universal Music Loses On Appeal In Eminem Royalty Case
September 7, 2010 at 3:03 AM (PT)
A Federal Appeals Court in SAN FRANCISCO has ruled against UNIVERSAL MUSIC GROUP in a lawsuit involving royalties from iTUNES downloads and mobile-phone ringtones brought by the producers who helped launch EMINEM’s career. FRIDAY's (9/3) ruling returns to a lower court the 2009 verdict "rejecting arguments by FBT PRODUCTIONS LLC that EMINEM is entitled to half the net receipts the record company gets for the downloads, rather than his standard royalties from record sales," reports BLOOMBERG.
UMG’s lawyers presented their case to jurors claiming iTunes downloads "were no different from retail sales of compact discs under the contract’s records sold royalties provisions. FBT PRODUCTIONS claimed that downloads fall under a 'masters licensed' clause governing the label’s licensing of the recordings to third parties, for which the artist gets a 50% royalty," added BLOOMBERG.
"The agreements unambiguously provide that notwithstanding the records sold provision, AFTERMATH [RECORDS, a division of UMG] owed FBT a 50% royalty under the masters licensed provision," the three-judge panel said in its ruling.
A UMG spokesperson, PETER LOFRUMENTO, told BLOOMBERG that the company will ask the appeals court for a rehearing. "In the meantime, it should be noted that this ruling sets no legal precedent as it only concerns the language of one specific recording agreement," he said.
The full decision can be found here.