The US Supreme Court has reportedly refused to hear an appeal, letting stand a lower court's decision that digital music should be treated as a licence. Though the artist at the centre of the suit is rapper Eminem, thousands of older artists who have not released an album in decades could become some of the biggest beneficiaries of the case.
The courts ruling that downloads, such as those from iTunes, are music 'licences,' not sales, made a big difference to Eminem because his 1995 contract entitles him to a full 50 percent of license revenue, and only 12 - 20 percent of sales. According to a New York Times report, several other artists, signed before the year 2000, are in the same boat. The fast-evolving law around digital downloads has reportedly caught the music industry asking for different treatment in different situations.
The legal distinction between whether digital content is a "sale" or a "licence" is reportedly hard to understate. Earlier in 2010, in the Vernor v. Autodesk case, the same appeals court that considered the Eminem case found that software sales weren't really sales at all - they were actually a licence.
The entertainment industry cheered that ruling then. Digital content means that essentially everything is being turned into software. The ruling, therefore, makes it much more likely that copyright owners will be able to maintain control of digital content even after they sell it. This will allow copyright owners to prevent re-sale and impose other restrictions on how the content is used.
Eminem's record label, the Universal Music Group, has emphasised that this is a narrow ruling that only applies to Eminem's contract. Other artists may have similarly constructed deals. It is expected that they will also examine legal avenues to make similar claims.
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