EMI files $100M royalty lawsuit against InfoSpace

The publishing division of recording industry giant EMI has filed a $100 million lawsuit against mobile entertainment provider InfoSpace, alleging the company and its Moviso and Premium Wireless Services subsidiaries have been underpaying royalties and selling ringtones without the proper licensing rights. In a complaint filed January 12 in U.S. District Court in New York, EMI says its auditors concluded InfoSpace was miscalculating download royalties due from Verizon Wireless and US Cellular; not reporting royalties for eight approved sub-licensees; and failing to pay royalties on EMI-owned compositions.

The suit, EMI Entertainment World vs. Premium Wireless Services, 07-CV232, charges InfoSpace "engaged in a deliberate effort to frustrate and obstruct the audit rights held by plaintiffs pursuant to license agreements," adding EMI requested an audit of InfoSpace's books, but was met with "diversion, obstruction, misdirection and misinformation" when InfoSpace said it not have access to many of its financial records, then refused to turn them over. EMI also alleges InfoSpace is selling expressly restricted songs including John Lennon's "Imagine," and selling ringtones in international markets where it has not been granted formal license.

A Form 8-K report filed with the SEC on January 19 and signed by InfoSpace senior VP, general counsel and secretary Robert Easter Jr., states "The lawsuit is at its initial stages and [InfoSpace] has just begun its factual investigation. Based on its knowledge to date, [InfoSpace] believes that EMI's claims are without merit and that it has meritorious defenses to them and intends to vigorously defend the suit."

For more on the lawsuit:
- read this Hollywood Reporter article

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