The publishing company representing Eminem's music has lost in its suit against Universal Music. As previously mentioned in this blog, at issue was whether digital downloads are considered records sales, which command a relatively lower royalty rate, or licenses, which command a higher licensing fee. The decsion is important because had Universal lost, the decision would have provided powerful precedential effect, opening record labels to a potential flood gate of cases involving ambiguous or wholly absent provisions addressing digital distributions. Essentially the court recognized the changing landscape of the record business, and concluded that a digital download today is more akin to the sale of record than it is a license (for example use of a record in a film or TV show). To be sure, an important victory for a beleagured record industry that can use all the good news it can get.

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