CONTRACT
Artists, record labels

Administrators of the Estate of Rick James are planning to test the extent of Universal’s unsuccessful defence to the claim in FBT Productions v Interscope where the court ruled that the music major’s relationship with services like iTunes should be treated as a licensing arrangement rather than a record sales relationship akin to that record companies have with traditional retailers meaning the artist (or here producer) was entitled t a large share of royalties. It’s an important distinction because many record contracts give artists a bigger cut of royalties when they are generated by licensing deals rather than record sales. The distinction seemingly applies to many contracts that pre-date the digital revolution, some of which still generate large revenues.
The lawsuit says: “By this lawsuit, the plaintiff seeks to compel UMG to account to and pay its other recording artists and music producers (ie, those not directly involved in the FBT litigation) their rightful share of the licensing income paid to UMG for downloads and mastertones of the recorded music licensed by UMG to these entities”. Commenting on the action, Jeff Jampol, manager of the James estate, told Billboard: “In assessing and watching the Eminem case, the original judge found for the production company and declared these were indeed licenses, and said it’s a matter of law unless there’s specific language in the contract to address this. Many entertainment industry attorneys have been lobbying about this issue for years”.
Universal insist the ruling in this case relates specifically to the wording of the hip hop producers’ contract and doesn’t set a more wide-reaching precedent telling reporters: “The complaint filed by the estate of Rick James suffers from many infirmities, not the least of which is that the claims asserted are not appropriate for class treatment. We intend to vigorously defend against it”.
http://www.theboombox.com/2011/04/05/rick-james-estate-files-lawsuit-against-umg/ and CMU Daily 5th April 2011  www.thecmuwebsite.com