Judge Rules For Universal Against MP3.com
A federal judge today ruled that MP3.com (http://www.mp3.com) acted willfully to infringe on Universal Music Group's (
http://www.universalmusic.com) copyrights when it built a CD database for its so-called "music locker" service, My.MP3.com .
U.S. District Court Judge Jed S. Rakoff ordered MP3.com to pay Universal Music $25,000 per infringed CD perhaps making MP3.com liable for as much as $250 million, depending on the number of CDs determined to have been used for the service.
MP3.com claims it used 4,740 Universal CDs, meaning the company would be liable to pay Universal $118.5 million. However, Universal, which had hoped to win $450 million, claims that 10,000 CDs were wrongfully copied pinning the amount to paid by MP3.com at roughly $250 million.
Rakoff will not determine the exact number of compact discs in question until after the second phase of the damages trial scheduled for November.
Either way, MP3.com has vowed to appeal the decision.
"We believe that everyone should have the right to listen to the music they purchase, even if it's on the Internet," said Michael Robertson, chairman and CEO of MP3.com in a statement. "While we respect the court, we disagree with the court's decision and we look forward to taking our case to the Court of Appeals."
MP3.com had previously reached settlements with four other of the "Big Five" recording labels-including Time Warner's Warner Bros. Music Group, Sony Corp's Sony Music Entertainment; Bertelsmann AG's BMG, and the EMI Group--allowing their music to be used in the My.MP3.com database.
In its settlement with the four other labels, MP3.com agreed to pay each label approximately $20 million in damages. As part of the settlements, the company would pay a fee each time one of the label's albums is registered by a user and another fee each time a user accesses one of its songs.
For their part, the Recording Industry of America Association, which represents the major recording labels, was encouraged by the decision, "We're obviously pleased with today's ruling," said Cary Sherman, general counsel with the RIAA, in a statement. "This should send a message that there are consequences when a business recklessly disregards the copyright law."
In a separate announcement, the RIAA has signed a deal with Yahoo to set up terms for music Webcasts on the popular portal. "Our agreement with Yahoo confirms that music on the Internet will thrive when parties work together," said RIAA CEO Hilary Rosen in a release. Terms of the deal were not disclosed.