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Jan. 23, 2007

Various news reports suggest that InfoSpace could be the subject of a suit filed by EMI Entertainment.

EMI's lawsuit alleges that InfoSpace has breached two ringtone license agreements. However, InfoSpace disagrees with the claims made in the lawsuit.

The lawsuit was filed in the U.S. District Court for the Southern District of New York and charges that InfoSpace underpaid royalties.

EMI's suit also accuses InfoSpace of fraudulently reporting the amount of royalties owed and infringed EMI's copyrights by making unlicensed use of its works.

EMI is seeking damages in excess of $10 million relating to the contract breaches, as well as unspecified compensatory and punitive damages for the alleged fraud.

Relating to its copyright infringement claims, EMI is hoping to collect more than $100 million in statutory damages.

"The lawsuit is at its initial stages and the company has just begun its factual investigation," said InfoSpace in a filing with the SEC.

"Overall, InfoSpace strongly believes that EMI's claims are without merit, and that it has meritorious defenses to them and intends to vigorously defend the lawsuit," according to InfoSpace.

The company lost Cingular Wireless as a customer in 2006, after the carrier decided to take services in-house. InfoSpace recently completed a restructuring plan that reduces its investment in mobile content. Moving forward, the company will concentrate its efforts on its online and mobile infrastructure businesses.

Two weeks ago, InfoSpace appointed Steve Elfman as executive v.p. to oversee its mobile business unit. Brian McManus was named executive vice president in charge of the company's online business unit.

InfoSpace is set to announce its fourth-quarter results next Thursday.

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Source: Wireless Week