Ninth Circuit: Downloads “Licensed” Under Eminem’s Contract; Entitled To Fifty Percent Royalties

The Ninth Circuit has decided that rapper Eminem’s iTune downloads, according to his contract with Universal Music Group (UMG), fall under the definition of “license” and has determined that the artist and his company are entitled to 50 percent royalties for the downloads. Says the court,

[T]he agreements unambiguously provide that “notwithstanding” the Records Sold provision, Aftermath owed F.B.T. a 50% royalty under the Masters Licensed provision for licensing the Eminem masters to third parties for any use. It was undisputed that Aftermath permitted third parties to use the Eminem masters to produce and sell permanent downloads and mastertones. Neither the 2004 amendment nor any of the parole evidence provisionally reviewed by the district court supported Aftermath’s interpretation that the Records Sold provision applied.

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