March 2, 2009 14:42

'Eminem download royalties' case goes to trial

Rapper's publishing company says he is owed money from downloads

Photo Gallery: Eminem
Photo: Pa Photos

Eminem's former publishing company's case against the rapper's record label Universal Music Group over download royalties has gone to trial.

Universal Music Group have released a statement saying that it is not the rapper personally who is suing them, claiming that they enjoy a "very close, creative and productive relationship" with him.

The trial began last week (February 24) at the US District Court for the Central District of California.

FBT Productions alleges that UMG owes the rapper over $1.6 million (£1.1 million) after under-paying him royalties for digital download sales of his music.

The prosecution is claiming that UMG has attempted to "camouflage" its agreements with third parties (such as download services) to pay Eminem the lower percentage of royalties usually associated with physical record sales – which are lower due to costs including packaging, reports the Wall Street Journal.

During the trial Lawrence Kenswil, a former business strategy employee of UMG, has said that although the costs incurred through download sales are not "manufacturing costs", there are still different costs that apply.

The defence is asserting that download royalty rates should be the same as those for physical sales because of these costs.

"It has costs," Kenswil said. "You don’t call them manufacturing costs the way that term has been used traditionally."

The case continues.