In 1999, Sony Music Entertainment was one of many labels to sue Napster for copyright infringement. Now, the company is suing the streaming service again for allegedly owing them over $9.2 million in unpaid royalties and licensing fees, while seeking $37.5 million for copyright infringement.
Napster was acquired by Metaverse company Infinite Reality in March, and they're also targeted in the lawsuit, along with Napster’s parent company Rhapsody International. Sony claims Napster is collecting subscription fees from “millions of paying users” while not fulfilling payments for over a year, which now total $9.2 million.
“When companies exploit Sony Music’s sound recordings for commercial benefit without authorization, this not only harms Sony Music by depriving it of compensation, but it also reduces the incentive to invest in the creation and dissemination of new music,” Sony's complaint reads.
It continues, “For over a year, Defendants have failed to pay Plaintiffs the license fees and royalty payments as required by the Foundation Media Content License Agreement, Orchard Content License Agreement, Content Integration Agreement, and Framework Agreement — all while Defendants continued to collect subscription fees from their millions of paying users.”
When Infinite Reality bought Napster for $207 million, Sony said the deal would enable their right to terminate its agreements with Napster, “which would deprive [Napster’s parent] Rhapsody of the ability to stream Plaintiffs’ valuable sound recordings.” Instead, Sony agreed to a payment plan that consisted of four installments. It would commence 15 days after the acquisition closed and would continue through January 2026. Napster allegedly failed to make any of the payments.
“Despite that termination, Defendants have continued to reproduce, distribute, publicly perform and otherwise exploit Sony Music Entertainment’s sound recordings on Napster, without any legal right to do so,” Sony's legal representatives state.
Sony is seeking damages for breach of contract up to $150,000 per infringed work, which could result in $37.5 million.
Napster was also sued by SoundExchange and Sonos in June for over $3.4 million in unpaid copyright royalties.
