Merlin has filed a lawsuit against LimeWire, charging that the shuttered peer-to-peer software company has failed to fulfill an agreement to reach a settlement with the indie international music rights group. It is seeking at least $5 million.
Earlier this year, Limewire settled with the National Music Publishers Association, agreeing to pay U.S. music publishers $12 million, according to sources; and agreeing to pay the four major labels $105 million.
Since 2008, Merlin and LimeWire have negotiated a series of agreements that would require LimeWire to pay the indie labels a pro-rata portion based on market share based on whatever material terms LimeWire might give to the major labels. if such a settlement ever took place. According to the court filings, Merlin says the labels it represents has about 7.5% market share.
However, since the settlement with the majors was announced in May this year, LimeWire has failed to make a "settlement offer to Merlin that includes a cash payment of no less than the amount of the cash payment made to the majors labels," subject to Merlin market share and some reasonable deductions.
Not all indie labels are represented by Merlin, although when the indie music-rights group negotiates a commercial agreement or settlement, there usually is a mechanism included that allows other non-affiliated indie labels to take advantage of the terms of each deal.
Reps for Merlin declined to comment on the situation; reps for LimeWire couldn't be reached for comment by press time.