F.B.T. PRODUCTIONS, LLC; EM2M, LLC, Plaintiffs-Appellants, v. AFTERMATH RECORDS, DBA Aftermath Entertainment; INTERSCOPE RECORDS; UMG RECORDING, INC.; ARY, INC., Defendants-Appellees. F.B.T. PRODUCTIONS, LLC; EM2M, LLC, Plaintiffs-Appellants, v. AFTERMATH RECORDS, DBA Aftermath Entertainment; INTERSCOPE RECORDS; UMG RECORDING, INC.; ARY, INC., Defendants-Appellees., 621 F.3d 958

Summary

Plaintiffs claimed the royalties for the artist's digital downloads and mastertones were to be calculated pursuant to the "Masters Licensed" provision of the agreement. Defendants argued the royalties were to be calculated pursuant to the "Records Sold" provision. The district court denied plaintiffs' pre-trial motion for summary judgment, finding the contracts were ambiguous. The appellate court concluded the agreements unambiguously provided that "notwithstanding" the Records Sold provision, defendants owed plaintiffs a 50 percent royalty under the Masters Licensed provision for licensing the artist's masters to third parties for any use, rather than the 12 percent royalty under Records Sold provision. The Copyright Act, 17 U.S.C.S. §§ 109, 114(d)(2), and 115, supported the conclusion that defendants' agreements permitting third parties to use its sound recordings to produce and sell permanent downloads and mastertones were licenses rather than sales because: (1) defendants owned the...