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F.B.T. Productions, LLC v. Aftermath Records

621 F.3d 958 (2010)

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F.B.T. Productions, LLC v. Aftermath Records

United States Court of Appeals for the Ninth Circuit

621 F.3d 958 (2010)

Facts

In 1995 rapper Marshal B. Mathers III (Eminem) signed with F.B.T. Productions, LLC (F.B.T.) (plaintiff), granting F.B.T. the exclusive right to Eminem’s recordings. In 1998 F.B.T. assigned this right to Aftermath Records (Aftermath) (defendant). The labels’ agreement contained a records-sold provision that entitled F.B.T. to receive between 12 and 20 percent of the price of Eminem’s records sold through normal retail channels. The agreement also contained a masters-licensed provision that stated that notwithstanding the records-sold provision, F.B.T. was entitled to receive 50 percent of Aftermath’s net revenue on masters that Aftermath licensed to others. The agreement defined a master as a “recording of sound . . . used or useful in the recording, production or manufacture of records.” In 2002 Aftermath’s parent company signed an agreement with Apple, permitting Apple to sell Eminem masters in digital format in Apple’s iTunes store. In 2006 F.B.T. sued Aftermath, claiming that it was improperly calculating royalties for digital downloads under the records-sold provision in their contract, instead of the masters-licensed provision. The district court denied F.B.T.’s motion for summary judgment, finding that each party’s interpretation of the contract was reasonable. The jury returned a verdict in Aftermath’s favor. F.B.T. appealed.

Rule of Law

Issue

Holding and Reasoning (Silverman, J.)

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