UMG Reaches Settlement in Trendsetting Suit Over Digital Revenue from Eminem Songs

A 2010 ruling in this case led dozens of big-name musicians to sue such corporations as Universal Music Group to collect more money from iTunes sales, ringtones and the like.

 It was September 3, 2010, the day the 9th Circuit Court of Appeals handed down a huge decision in a path-breaking case involving the music of hip-hop superstar Eminem.

On Monday, FBT Productions and Universal Music Group informed a California federal court a resolution had been reached, putting to rest a dispute that has been closely followed throughout the industry.

At the 9th Circuit, the judges ruled that a lower court had erred by not deeming the label's agreements with third-parties download providers as licenses instead of sales. For the music industry, the difference was enormous. Under typical licensing or leasing provisions of artist-label contracts, about 50 percent of collected revenue gets handed over to artists. Under sales provisions, it's usually not more than 15 percent.

After the ruling came out, the big question remaining in the FBT Productions case was the damages for improper royalty treatment. The case was remanded back to a district court as the parties, FBT Productions and UMG, continued to quibble with each other.

Other musicians continue to fight to apply the 9th Circuit ruling on "licenses" to their own contracts. Class actions from the likes of The Temptations and Rob Zombie are still being litigated. Other artists such as REO Speedwagon, Kenny Rogers, Sister Sledge, James Taylor and on and on have brought a barrage of lawsuits on this front. Some entities in the music business such as Sony Music have made class action settlements.

Read More: http://www.hollywoodreporter.com/thr-esq/umg-reaches-settlement-trendsetting-lawsuit-384381