A war of words between one of South Africa's biggest mobile phone content providers and the territory's leading publishers' association is setting the scene for a court battle over digital royalties.

The Johannesburg-based National Organisation for Reproduction Rights in Music in Southern Africa (NORM) has issued Exact Mobile - also based in Johannesburg - with a multi-million Rand summons to claim unpaid mechanical digital use royalties due on digital mobile phone downloads sold by Exact Mobile.

The summons was filed in the Cape Town high court and asks for an order to compel Exact Mobile to cease infringing the copyright of NORM's members and pay a royalty of 7.5% backdated to Jan. 1 2006.

NORM is a collecting and licensing body representing all major publishers in South Africa, including Sony ATV, Universal Music Publishing, EMI Music Publishing and Gallo Music Publishing (the Warners licensee in SA), as well as many independents and songwriters. It is also asking for two million Rand ($245,492) as additional damages as a result of the continued sale of mobile content containing copyrights.

NORM claims Exact Mobile has reneged on a commitment to pay its members the 7.5% of the retail price of ringtones that the society believes is the "reasonable rate" specified in the Copyright Act. It claims that agreements already concluded with a dozen other mobile content providers - including Musica, which is also one of South Africa's major bricks and mortar retailers - at 7.5% proves the rate is reasonable.

John Fishlock, NORM Board member and MD of Universal Music Publishing, has said the collecting and licensing body believed that legal remedies are the only ones left.

Exact Mobile fired back a response revealing it will defend the court action. A company representative has confirmed to Billboard.biz that it has filed notice to defend in the Cape Town high court.

In a statement issued early September, CEO Davin Mole claimed it had "consulted copyright experts, as well as other major players and we are confident our offer of 5% is a reasonable and fair offer, which is market related and meets the expectation of the Copyright Act." He added that Exact Mobile and "other major players in the industry have the royalty payments accrued in trust accounts, ready to pay out as soon as NORM is willing to accept the payment".

Exact Mobile also announced it had concluded an agreement with the South African Recording Rights Assn. Limited (SARRAL) on Sept. 10, via its membership of the Wireless Application Service Providers' Assn. (WASPA). Under the terms of the agreement, WASPA members - including Exact Mobile - will sign individual agreements with SARRAL for a licence for mechanical rights for digital music sales at a rate of 5% of retail sale price.