Reposted from DLA Piper’s Media Intelligence Bulletin

Editorial Team: Nick FitzpatrickDuncan Calow and Patrick Mitchell

Peter Frampton has filed a lawsuit against Universal Music Group (“Universal Music”) in respect of unpaid music royalties.

Peter Frampton filed a suit on 23 December 2011 against record label Universal Music for half a million pounds worth of unpaid music royalties and unspecified damages, making him the latest artist to make a claim against a record label in respect of digital royalties.

In 1998 Frampton contracted with A&M Records, a label owned by Universal Music, to receive a 50% royalty for the use of any “licensed” music. The lawsuit claims that the company failed to pay a 50% royalty on the digital sales of Frampton’s music and Universal Music “systematically and knowingly” breached the contract.

This case adds to the long-running dispute as to how revenue in sales of digital music should be shared between artists and record labels, with some artists arguing that due to less expenses being incurred in relation to packaging and shipping, they are entitled to larger royalty payments commonly found in deals relating to the licensing of music for films or TV.

In 2010, in the F.B.T Productions v Aftermath Records case, the Ninth Circuit Court of Appeals (“Ninth Circuit”) ruled in favour of the rapper Eminem and his producers, F.B.T, finding that, under their agreement with Aftermath, digital music should be treated as a license subject to a 50% royalty payment. The Ninth Circuit relied on federal copyright law to determine that Aftermath’s relationship with digital retailers such as iTunes involved a license as opposed to a record sale. As their agreement only permitted third parties to use their sound recordings to sell permanent downloads and mastertones, it was more akin to a license than a sale as, under federal copyright law, the former involves the copyright owner retaining title and limiting the use to which the material may be put.

Frampton and other artists will be hoping that the Eminem case sets a strong precedent for courts to follow.