MMG and EMI have filed a law suit against Walla Communications (a public company traded in the Tel Aviv Stock Exchange) and the local distributor of Coca Cola "The Central Company for Soft Drinks" for unauthorized use of their copyrights for promotion of the Coca Cola brand. The suit was filed in the district court in Tel Aviv on Sunday the 16th of October for the sum of 3.5 Million ILS (about 700K USD).

The suit relates to the operation of the internet site www.mymusic.co.il that was operated by Walla on behalf of Coca Cola. The site started to operate in 2003, using musical compositions for the promotion of the Coca Cola brand, without having obtained from the copyright owners any license for such use.

The main elements of the claim are:

· Initially, a license was granted to Walla by ACUM (the Israeli copyright society), allowing Walla to stream music to web-surfers. The license prohibited Walla from sub-licensing the rights to third parties without prior approval by ACUM.

· The license also prohibited Walla from using the musical works in connection or association to any other content, in particular advertisements and sales promotion, without the express authorizations of ACUM and the composers and lyricists.

· Walla decides nevertheless to grant rights to Coca Cola. The Music Site of Coca Cola was designed to serve as a hub for the advertisement and marketing of the Coca-Cola brand and products the music site, attracting web-surfers by associating the Coca Cola logo, the name “My Music”, the artists and the songs.

· The activities of Walla constitute a breach of contract and an infringement of the Israel Copyright Act 1911; Coca Cola's activities on the music site are in violation of the Copyright Law 1911 and of the Law on Unjust Enrichment.