Marshal Mathers III, the recording artist better known as Eminem, has put up quite a fight to get higher royalties from digital downloads of his music. Last Friday Mathers’s persistence paid off when the 9th U.S. Circuit Court of Appeals reversed a lower court and held that a group of recording companies, including UMG and Interscope Records, had been underpaying him for royalties on downloaded music.
At issue was a recording contract negotiated in 1998, before the era of digital downloads. Mathers’s lawyers at Howard Rice Nemerovski Canady Falk & Rabkin argued that downloads should be covered by a provision in the contract that set a 50 percent royalty rate for “masters licensed by [the recording companies] … to others for their manufacture and sale of records or for any other uses.” This provision, they argued, “fits these digital downloads like a glove.” In contrast, the recording companies maintained that Mathers should be paid the same royalty rate on downloads that he receives on compact disk sales, which ranges from 12 to 20 percent. The named plaintiff in this case is Mathers’s former production company, FBT Productions.
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