The 12 Percent Solution
F.B.T. Productions sued Universal Music Group, Dr. Dre’s Aftermath Records and distributor Interscope Records, claiming the production company should have received 50 percent of all CD download sales.
The argument was about how royalties for digital download sales are tallied. F.B.T. claimed such royalties should be determined based on master recording licensing deals like the one between Universal and Apple, entitling the production company to a 50-50 split with Universal.
The difference is how you look at online sales. In this case, the plaintiffs argued that downloads constituted a master copy because infinite, perfect duplicates could be made from one download.
But the federal jury unanimously ruled download sales should be treated the same as physical sales and that the company should only get the agreed-upon standard – 12 percent.
Like anyone who has ever walked out of courtroom with less money than expected, F.B.T. wasn’t a happy camper.
‘We are very surprised by the jury’s verdict,” said F.B.T. lawyer Richard Busch, according to the Los Angeles Times. “We don’t understand it, and the fight’s not over.”
Busch has a reason to be disappointed. Had F.B.T. won the lawsuit, the company would have received up to $1.3 million in additional royalties which it would have split Eminem, whose real name is Marshall B. Mathers III.
The lawsuit wasn’t a total loss for F.B.T. Universal did acknowledge an accounting mistake, resulting in F.B.T. being owed $159,000, which the jury included in its decision.
Of course, where there are losers there are also winners. In this case, Universal Music Group. A spokesman for the record label said UMG is “very pleased with the jury’s verdict.”
Meanwhile, F.B.T. is reportedly considering its options, and has not ruled out an appeal.
Click here for the Los Angeles Times article.