Updated below: If this lawsuit drags on, the drain on Infospace could be lethal, reeling as it is from all kinds of troubles: The publishing arm of music label EMI has filed a $100 million lawsuit against Infospace, alleging that the company and its subsidiaries Moviso and Premium Wireless Services have been underpaying royalties and selling ringtones for songs to which they hold no licensing rights, reports THR Esq. In a complaint filed Jan. 12 in U.S. District Court in New York, the suit also states that the InfoSpace defendants “have engaged in a deliberate effort to frustrate and obstruct the audit rights held by plaintiffs pursuant to license agreements.”
EMI publishing also says InfoSpace is selling expressly restricted songs, such as John Lennon’s “Imagine,” and selling ringtones in worldwide markets where it has not been granted license. The label requested an audit of InfoSpace’s books but was met with “diversion, obstruction, misdirection and misinformation.”
Updated: Infospace has filed an 8-K on this: “EMI claims in excess of $10 million in damages for the alleged breaches of contract, unspecified compensatory and punitive damages for the alleged fraud, and in excess of $100 million in statutory damages for alleged copyright infringement. The lawsuit is at its initial stages and the Company has just begun its factual investigation. Based on its knowledge to date, the Company believes that EMI’s claims are without merit and that it has meritorious defenses to them and intends to vigorously defend the suit.”