Photo Credit: Triller
Indie music licensing conglom Merlin is now suing TikTok rival Triller over allegedly violating a licensing agreement between the two.
The lawsuit, filed on Thursday (March 27th) in the US District Court for the Southern District of New York, alleges that Triller violated a licensing agreement the two companies have shared since 2020. That agreement is said to contain a “most favored nation” (MFN) clause, requiring Triller to make up the difference to Merlin if it offered higher licensing fees to another music company.
Merlin says it discovered the violation in another lawsuit filed against Triller in 2022. While Merlin’s complaint doesn’t name the other company, it’s likely to be Sony Music Entertainment, which sued Triller in 2022 with allegations of “millions” in unpaid licensing fees.
Triller and Sony came to an agreement requiring the former to pay the latter $4.57 million — but Merlin discovered through the course of that lawsuit that Sony had secured a better deal. This means Triller was then required to pay the difference to Merlin.
According to the complaint, Merlin and Triller came to an agreement that Merlin was owed $2.55 million, but Triller never made that payment.
Merlin’s lawsuit also claims Triller reneged on another part of their agreement. In their 2020 licensing agreement, Triller gave Merlin a warrant for the option to buy a certain amount of stock at a set price. This option allegedly stipulates that Triller is required to honor that warrant even if the company were sold or merged.
Triller went through a merger last year with Hong Kong-focused financial services firm AGBA. The newly merged organization began trading on the NASDAQ in October — but Merlin alleges its original warrant for Triller stock should have been converted to a warrant for an equivalent amount of stock under the new Triller Group. The indie collective says that never materialized.
“Merlin has still not received information regarding how Triller intends to handle the matter. Merlin was promised new warrants in November, and Triller has yet to deliver those warrants,” the complaint reads.
The indie collective is asking for $2.55 million in licensing fees plus interest, as well as for the court to order Triller to honor the warrant it gave Merlin, or to award damages for failing to do so.
Content shared from www.digitalmusicnews.com.