Toto Suing Sony For Online Royalty Payments

Add Toto to the list of heritage acts suing their labels for not treating download sales as a license arrangement, which require 50% of net proceeds to be paid to the band, according to a lawsuit filed in the U.S. District Court for Southern New York on behalf of the band

King & Ballow and Gordon, Gordan & Schnapp filed the suit against Sony.

The suit against Sony make the case that downloads sales by a store like iTunes is a licensed arrangement and should be treated like other deals were music is licensed to third parties and pay 50%, instead of treating downloads like CD sales, which means that labels generally pay an artist royalty in the range of 12-20% of wholesale.

According to the lawsuit, Sony has failed to account and pay 50% of net receipts from leasing Toto's masters to third parties, including music download and mastertone providers. It also seeks a declaration that Sony is obligated to pay Toto 50% of net receipts for those uses.

Peter Frampton and the estate of the Knack's Bruce Gary have filed similar lawsuits against Universal Music Group-owned A&M and Capitol Records, respectively, concerning whether downloads should be considered a licensed arrangement that requires net proceeds to be split evenly between the artist and the label.

Toto's suit alleges that Sony failed to properly account and pay Toto for sales of the masters, incorrectly paying the group on products sold. It also claims that the label failed to allow Toto a full and fair opportunity to conduct and audit, and claims that Sony is attempting to recoup monies not owed to the company.

Consequently, the lawsuit charges that Sony has breached the contract and is seeking compensatory damages in excess of $605,000, plus interest, a full accounting and attorney fees.

A Sony spokesman was unavailable to comment.