Furdlog is on a roll today. Among other things, he notes the clever legal argument that the publishing company that has the rights to publish musician Tom Waits' music is making in a lawsuit against Warner Music Group. According to a Reuters wirestory on Yahoo! News, Waits' publishing company is suing WMG for not paying enough royalties on downloaded music (Publisher sues Warner Music over Waits tunes).

According to the suit, under the terms of the two contracts, Waits was entitled to royalties of either 25% or 50% from revenues derived from third-party licenses. Third Story maintains that digital music downloads constitute a form of third-party license, and that Waits is entitled to payment at that level.

In 2003-04 royalty statements to Third Story, WMG computed royalties from Waits' digital download sales at the same (and much lower) rate as royalties from the sale of physical product. Under the terms of the '70s Asylum contracts regarding album sales, Waits would be entitled to either 9% or 13% of the 67 cents received by WMG from each 99-cent download.

Of course, they'll just ensure that all future contracts close this possible loophole.