Rondor Music, who owns the rights to the Beach Boys' 1965 hit song California Girls, sent a letter to Perry's label, Capitol Records, demanding Brian Wilson and Mike Love get credit for their lyrics, including royalties.
At the end of the chart topping summer tune, Snoop Dogg says "I really wish you all could be California girls," which is lifted from the Beach Boys' tune.
And, in a statement the company says, "We have established diminutive claim. It is up to the six writers and various publishers of "California Gurls" to decide whether they honor the claim or not."
The statement continues, "Using the words or melody in a new song taken from an original work is not appropriate under any circumstances, particularly from one as well-known and iconic as 'California Girls."'
However Love insists, "The Beach Boys are definitely not suing Katy Perry," whist Perry took to her twitter account and says, "Just to be clear...no one is suing anyone. The press just loves to once again fabricate & exaggerate stories to get hits or sell papers."
The report of a potential lawsuit came as a surprise after both Love and Wilson recently praised Perry's song -- which has reportedly sold 3 million copies -- including Snoop Dogg's cameo.