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More legal wrangling in 19 v Sony battle

By Chris Cooke | Published on Wednesday 20 May 2015

There has been more pre-trial wrangling in what could well be the most interesting of all the music-based legal battles this year: the battle of the Idols (heightened interest in which may or may not have resulted in Sony’s Spotify contract being leaked).

As previously reported, music company 19 is suing it’s former business partner Sony Music over the record contracts signed with the major by various ‘American Idol’ finalists. 19 owns the ‘Idol’ franchise and managed many of the stars who came out of the show, while Sony was, for a time, the record company with the rights to sign finalists that appeared on the programme.

There are an assortment of gripes in 19’s lawsuits on behalf of the former Idols it continues to represent, most of them relating to common areas where artists and labels fall out, including fees the major charges as money moves around the company, what happened to the cash Sony received from its LimeWire settlement, and the biggy, whether digital income should be treated as a ‘sale’ or a ‘licence’ when artist royalties are calculated.

Sony failed to have 19’s lawsuit dismissed back in March. It then filed its own countersuit that claimed some of the former Idols 19 represents had actually been overpaid by the record company, while also concurrently asking for the judgement on dismissal to be reconsidered.

And in the latter domain it had some success earlier this month, when a judge decided that, actually, 19’s claim that Sony had acted in bad faith over digital royalties should not be allowed to proceed, though breach of contract allegations could be given a full court hearing. So a partial win for Sony then.

Which means that 19 is now trying to have the dismissal dismissed, by asking that the matter be handed to the Second Circuit Court Of Appeals, who would be asked to rule on whether the bad faith allegation, as well as the breach of contract allegation, should be allowed to stand in 19’s lawsuit. So that’s basically an appeal for an appeal of an appeal before this case has even properly reached court. Hurrah for lawyers!

Sony will battle hard to keep as much of this dispute out of the courts as possible, and will then presumably do everything it can to secure one of those depressing (for the rest of us) out of court settlements. But should even half this case get to court it should make for interesting viewing. And especially with any digital royalty debates that occur, given the existing cases on this matter – focused as they are on iTunes income – look ever dated as the industry speeds into a stream-dominated market.