Cameo Clips

Two federal courts have differently interpreted royalty clauses related to the digital sales of sound recordings. In a suit by F.B.T. Productions ' to which rapper Eminem signed in the 1990s ' the U.S. Court of Appeals for the Ninth Circuit decided that the production company had the unambiguous right, under F.B.T.'s 1998 and 2004 agreements with Aftermath Records, to 50% of the net income received from third-party exploitations of permanent downloads and mastertones. F.B.T. Productions LLC v. Aftermath Records, 09-55817. Aftermath argued that the lower contract rate of 12% to 20% applied instead, for Eminem records sold by Aftermath through “normal retail channels.” But the appeals court noted of the F.B.T./Aftermath agreements that, “'notwithstanding' the Records Sold provision, F.B.T. is to receive a 50% royalty on 'masters licensed by [Aftermath] ' to others for their manufacture and sale of records or for any other uses.' ' Aftermath did not dispute that it entered into agreements that permitted iTunes, cellular phone carriers, and other third parties to use its sound recordings to produce and sell permanent downloads and mastertones. Those agreements therefore qualify as licenses under Aftermath's own proposed construction of the term.”