Universal Music Group, Aftermath Records and Interscope Records have appealed to the U.S. Supreme Court a Ninth Circuit ruling over royalties owed on Eminem music.
The case concerns whether the defendant record labels owe F.B.T. Prods, the outfit that discovered Eminem, a higher royalty rate on music sold as digital downloads and ringtones or whether they are merely obligated to pay the same royalty rates traditionally used in physical sales. The case is important insofar as it's one of the first published appellate decisions to discuss how traditional music recording agreements should be interpreted in respect to the treatment of digital music distribution.
In September, the Ninth Circuit held that a district court had improperly denied FBT's motion for summary judgment. The justices saw digital downloads as "licenses" rather than a traditional sale, which meant that FBT was owed as much as a 50% royalty rate instead of rates between 12 to 20%.
UMG tried to get the Ninth Circuit to rehear the case, but that motion was denied. Now, the record giant is looking to bring the case to the U.S. Supreme Court, filing a writ of certiorari that petitions for a hearing.
According to the petition, UMG wants the Supreme Court to consider the question of whether F.B.T. should have been allowed to appeal the district court's summary judgment order after a full jury trial in the case.
The question is a technical one, but UMG also offers plenty of background on the millions of dollars at stake in an extremely long brief prepared by its attorney, Paul Clement, the former U.S. Solicitor General. Other artists from Cheap Trick to Pink Floyd have also challenged how their old contracts apply to new methods of music distribution, so this is obviously a case that the record industry is taking very seriously.
Here's UMG's petition for writ of certiorari.