[UPDATE: The trial has begun. See below.]
Barring a last-minute settlement, Apple will face Eminem’s music publisher in a Detroit courtroom this morning.
At issue are royalties on 93 songs that Apple (AAPL) has been selling on its iTunes music store under an agreement with Dr. Dre’s Aftermath Records, which controls the rapper’s sound recordings.
Eight Mile Style LLC, Eminem’s music publisher, claims copyright infringement and is seeking to recover the $2.58 million it estimates Apple has earned from sales of the music plus damages, which it set at $150,000 per infringement, or nearly $14 million.
Apple had hoped to cut a deal — and avoid a trial — in private settlement talks supervised by U.S. Magistrate Judge Virginia Morgan. But those talks broke down Wednesday night, according to the
Detroit Free Press
The non-jury trial was scheduled to begin at 9 a.m. ET in the courtroom U.S. District Judge Anna Diggs Taylor. It’s not clear whether Eminem, whose real name is Marshall Mathers III, will testify.
The dispute dates back to July 2007, when Eight Mile Style and Martin Affiliated sued Apple, alleging that digital rights to Mathers’ songs were sold without their approval. A copy of the suit is available here.
The music publisher had previously sued Apple for unauthorized use of his hit single “Lose Yourself” in an iTunes TV commercial. That dispute was settled out of court.
In his opening statement, Eight Mile attorney Richard Busch said unique wording in Eminem’s contract with Aftermath Records requires the record company to get separate deals before it can sell downloads of Eminem’s songs over the Internet.
The record company “knew that they did not have the right to make these songs available for digital download without a separate digital download agreement,” Busch told U.S. District Judge Anna Diggs Taylor.
But Apple attorney Glenn Pomerantz told the judge the case is all about greed and Eight Mile Style wants the court to ignore the plain language of the record contract.
“What is really at issue in this case is that they want Apple’s profits,” Pomerantz said. “That’s what they are here asking for.”
Eight Mile Style was paid 9.1 cents for each music download covered by its contract with Aftermath and continued to cash checks that included such revenue even after it filed the federal lawsuit in 2007, Pomerantz told the judge. (link)