EMI sues InfoSpace over ringtone royalties, licensing

Music publisher EMI Entertainment World Inc. has slapped InfoSpace Inc. with a $100 million lawsuit, claiming the buffeted mobile content company has been underpaying royalties and selling ringtones without proper licensing rights.
The suit, filed Jan. 12 in U.S. District Court in New York, accuses InfoSpace and its subsidiaries Moviso and Premium Wireless Services of breaching two ringtone license agreements by fraudulently reporting the amount of royalties owed and infringing on EMI’s copyrights. EMI also charged InfoSpace with obstructing its efforts to audit InfoSpace’s books.
“The lawsuit is at its initial stages,” InfoSpace declared in a filing with the Securities Exchange Commission, “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.”
The news marks the latest in a series of challenges for InfoSpace, which last year lost a major carrier customer when Cingular Wireless L.L.C. said it would deal directly with music labels for ringtones. The company in November said it would halt investment in its direct-to-consumer business, including the recently launched Moviso storefront, opting to focus on its online and mobile search offerings.