The Temptations file suit against UMG over iTunes royalties

Joining many other acts in having the same issue with their label, legendary Motown group The Temptations have this week filed a suit against UMG (Universal Music Group) for millions of dollars in unpaid royalties, claiming they have not been given the correct amount of revenue from ringtone and digital download sales.

The Temptations' suit, which covers other artists in similar situations, cites the trial of F.B.T. Prods., LLC v. Universal Music Group - in which the Detroit-based production company won a ruling against the music giant - in their case, stating in their complaint:

“UMG’s Standard Recording Agreements are, in every material way, the same as those at issue in F.B.T. Prods. Accordingly, Plaintiffs here allege that the digital download income received by UMG from Digital Content Providers are based on ‘licenses’ and not ‘sales,’ as those terms are defined in UMG’s Standard Recording Agreements with these Providers. Just as in F.B.T. Prods., UMG has not properly accounted for the appropriate amount of royalties owed to Plaintiffs and Class members.”

In the F.B.T. Prods. case, the production company that once represented Eminem argued that digital downloads should be considered licenses, not sales, and that they were therefore entitled to the standard 50 percent licensing royalty instead of the 12 percent sales royalty they were receiving. They argued that record companies’ arrangement with digital retailers was more like a licensing agreement than a sale because they only provided retailers with a single master recording and did not incur the same costs related to manufacturing physical copies. Eminem was not part of the F.B.T. suit. The U.S. 9th Circuit Court of Appeals in San Francisco ruled in favor of F.B.T. in 2009; in 2011, the U.S. Supreme Court refused to hear Universal’s appeal. Damages are currently being determined.

Along with the F.B.T. Prods. case citation, the Temptations’ suit also quotes the late Steve Jobs, who once wrote, “since Apple does not own or control any music itself, it must license the rights to distribute music from others, primarily the ‘big four’ music companies: Universal, Sony BMG, Warner, and EMI.”

The Temptations are currently receiving a 14 to 16 percent sales royalty and are seeking the 50 percent licensing royalty they claim to be owed. The group is represented by 13 attorneys from five law firms and is claiming breach of contract and unfair competition.

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