Toto lose digital royalty battle

November 2014

Artists, recorded music


Sony Music Entertainment does not owe digital music royalties to the rock band Toto, best known for its 1980s pop hits “Rosanna” and “Africa,” a federal judge ruled. Toto was dissatisfied with the terms of a $8 million class action settlement that their fellow bands The Allman Brothers Band, Cheap Trick and other recording artistes reached with Sony two years ago over digital music download and streaming royalties, Rolling Stone reports.  Its auditor claimed that Toto deserved “50 percent net receipts” on digital downloads. The band reunited in 2010, and two years later sued Sony in the federal court, seeking $605,000 in compensatory damages for breach of contract and other claims. During discovery, the parties “put music executives on the hot seat”, but also reportedly quibbled over whether a “lease” and “licensee” agreement applied to their contract. Toto contended that the words meant the same thing, but Sony disagreed. U.S. District Judge Richard Sullivan turned to Black’s Law Dictionary and Webster’s Dictionary before ultimately siding with Sony on this issue. “[T]he dictionary definitions of the terms reflect that they are not synonymous, with ‘lease’ generally pertaining to rights in real or tangible property, and ‘license’ typically applying to intellectual property,” the 12-page opinion states.  Toto threatened more litigation if Sony stopped distributing its albums through certain retailers. Sony tried to prevent this by filing a countersuit seeking a judgment that it had the right to “refrain” from the “manufacture, sale and dealing” of Toto’s records. Sullivan ruled that it was premature to prevent a lawsuit that is “more hypothetical than real” at this point.  He has not yet ruled on Sony’s remaining counterclaim that it is owed $500,000 in royalties it says it overpaid the band over the years

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