updated 04:15 pm EDT, Mon April 30, 2012
Depositions by Steve Jobs, Eddy Cue at heart of controversy
Apple is fighting a discovery request in a class action lawsuit brought by musicians like Rick James and Rob Zombie against Universal Music, The Hollywood Reporter reports. Specifically the plaintiffs want access to trial exhibits, expert reports, depositions, and other material from a suit by FBT Productions against UMG subsidiary Aftermath, filed over money owed from music by rapper Eminem. During the case, the 9th Circuit Court of Appeals ruled that FBT was right in saying that a contract between the parties should be read as treating digital music as "licenses" instead of "sales." The dispute is still set to go to trial in the near future.
The iTunes Store has been central in the FBT matter, and Apple's objection claims that the court documents contain "highly confidential and proprietary trade secrets" involving Apple dealings with Universal and other record labels. The company specifically points to depositions by Apple co-founder Steve Jobs and one of his senior VPs, Eddy Cue, during which many people -- including Universal workers -- were forced to leave the room. When Jobs' deposition was played in front of a jury, the judge took the additional steps of closing the courtroom and having transcripts sealed.
Universal recently lost another attempt to dismiss the class action lawsuit. The judge asked the two sides to meet, and file a motion in the FBT case to seek relief from a protective order. Apple claims, though, that the plaintiffs haven't shown the relevance of the FBT/Universal documents, and in fact accuses them of filing a motion that's "broad but indiscriminate" and could hurt its competitiveness if it's made to comply.
The Reporter suggests that the FBT matter alone may have millions of dollars at risk. More broadly, the issue is that if digital music counts only as "sales," artists can only claim about 10 to 20 percent of revenue, instead of the roughly 50-50 due for licenses.