Tag Archives: Internet royalties

Clinton Sings Sad Tune in Court but Loses

Singer, composer, performer, George Clinton’s request for $33 million, in allegedly unpaid royalties, hit a wrong note with the Central District of California Court. In fact, Judge Philip S. Gutierrez, on remand from the 9th Circuit and having allowed Clinton to amend his earlier complaint to add “for the first time in this protracted litigation … a new claim for alleged underpayment of ‘internet royalties, i.e., exploitation by ‘download providers . . . and mastertone providers . . . for permanent downloads’” against Universal Music Group Inc. (UMG), has granted UMG’s motion for summary judgment.

In this case Clinton claimed that UMG failed to pay him appropriate royalties. UMG’s defense to these claims was simple: they argued that Clinton’s claims were barred by their 1980 performance contract, a copy of which is below. The contract provided that Clinton must specifically object to any royalty statement within 3 years of receiving the statement.  One problem was that UMG apparently had trouble finding Clinton:

“For a period of time, UMG was unable to locate Clinton and the royalty statements it sent were returned as undeliverable. In the spring or summer of 2001, UMG did locate Clinton and provided him with his first royalty statements and payments from Defendants for the exploitation of Parliament sound recordings under the 1980 Agreement. The royalty statement covered the period from 1996 through 2000, and the payment amounted to over $800,000.”

The contract further provided that Clinton was deemed to have received the statement, unless he informed UMG otherwise, within 90 days of the end of the statement period. There was controversy over a subsequent agreement which, as written, tolls any relevant statute of limitations regarding contract rights of the 1980 agreement. Clinton argued that the specified tolling also tolled contractual obligations such as the requirement that he provide specific objection to royalty statements. The issue at hand was whether Clinton ever timely and properly objected to payment of “internet royalties.” This Court found that he did not, stating, “[T]he 1980 Agreement bars Clinton’s internet royalty claims here.” Clinton was contractually barred from challenging royalty statements for the period of 1991-1999 because, in part, “in each of the two audit reports, Clinton not only categorizes the different types of royalties allegedly owed (omitting any reference to internet or internet-related royalties), but also itemizes each category and identifies the infringing records, artists, television shows, and movies, without ever referencing the type of claim he now raises as owed internet royalties.” As to later royalty statements and other related claims, Clinton’s argument became irrelevant because even if the contractual obligations were tolled, as applied to royalty statements provided after the tolling agreement, the Court found that either Clinton did not have any evidence to support his claims or there is no genuine dispute of the claim stated.

However, the Court did deny UMG’s request to deny Clinton an accounting based on their finding that there could be a material disagreement as to the relevant facts.

The court’s order is below:
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Clinton’s Production Agreement is below:
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