The class action lawsuit filed by the Allman Brothers Band alleging that Sony Music is not paying 50% of the net licensing and leasing income received from digital download stores, as the Brothers believe they are contractually obligated to, has been reinstated by a U.S. Federal Court Judge.
A recent Cailfornia court decision in a somewhat similar case brought by the co-owners of some Eminem material against Interscope found that digital transactions constituted a sale rather than a licence. But if this court finds that Sony licensed or leased its master recordings to digital download providers, it - and other labels - could owe millions of dollars to thousands of artists who signed deals from the 1960's to mid-1990's.
The case (Gregg Allman, et al., against SONY BMG Music Entertainment) was first filed in 2006 and later dismissed over a technicality involving the language in the filing (specifically that “leasing” and “licensing” were not synonymous). District Judge George B. Daniels ruled late last week that Sony BMG’s motion to dismiss has now been denied and the case will proceed on its merits.
Gregg Allman and fellow members of the Allman Brothers Band, are represented by the New York law firms of Caplan and Ross, LLP and Labaton Sucharow LLP, and Probstein & Weiner of Los Angeles. “We are pleased with Judge Daniels decision to move forward,” said Brian Caplan, of Caplan and Ross, LLP. “and are looking forward to this case going before a jury on the merits of our claim.”
“When a customer obtains music now, whether through iTunes, or other providers, they receive a license from the provider which significantly restricts their use of the song, which cannot be resold or transferred to others. The lawsuit maintains that this is contractually different from a record, tape or CD sale, with no restrictions, and obligates the record label to pay the artist fifty percent of its net licensing/leasing fee revenues as specified in the original contracts,” said Caplan. “Judge Daniels is now satisfied that there is enough merit to this argument to proceed with the case, a major development for our clients.”