Facts

Toto Inc., a music group that gained fame in the 1980s, sued Sony Music Entertainment in a New York district court and Sony asserted counterclaims against Toto.

PLAINTIFFS' CONTENTIONS:
Toto alleged that between 1977 and 2003, it entered into a series of recording agreements with Sony, whereby Toto agreed to provide master recordings to Sony, and Sony agreed to distribute and sell the recording. Toto also alleged that pursuant to the recording agreements, Sony was obligated to pay Toto under a certain royalty structure. Toto further alleged that Sony failed to pay Toto the proper amounts due under the royalty structure of the agreements. Toto argued that royalties on digital downloads should have been 50 percent net receipts pursuant to a certain "lease provision."

DEFENDANT'S CONTENTIONS:
Sony denied the allegations of plaintiff's claims and argued that Sony had mistakenly made royalty overpayments to Toto. Sony contended digital downloads were subject to a certain "audiophile provision" rather than the lease provision. Sony further argued for declaratory judgment that it had a right to cease distribution of Toto records through any particular online retailer.

Result

The court granted Sony's motion for summary judgment on Toto's breach of contract claim, finding that the audiophile provision provided the applicable royalty rate for the disputed recordings. Since Sony paid Toto pursuant to the rate in that provision, the court found there was no breach. The court also granted Toto's motion for summary judgment on Sony's declaratory judgment claim, finding that the claim was not ripe.