March 22, 2007 5:28 PM PDT
Music publishers accuse XM of copyright infringement
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In a complaint filed in New York federal court, the National Music Publishers Association (NMPA) argues that the satellite radio operator's "XM + MP3" music service skirts copyright laws by allowing radio listeners to make permanent copies of on-air tracks through devices like the Pioneer Inno player without permission and without properly compensating songwriters.
The service "constitutes pervasive and willful copyright infringement to the overwhelming detriment of copyright holders, legitimate online music services and, ultimately, consumers," lead attorney Debra Wong Yang said in a statement.
The legal action by the music publishers arrives about two months after a federal judge ruled a similar legal challenge lodged by record labels could proceed. In that dispute, XM argued that its listeners are legally allowed to record music off the radio for personal use under the Home Recording Act of 1992.
Federal courts have upheld users' rights to record music from over-the-air radio for some purposes. The music industry argues that the "iPod-like" devices marketed by XM are closer to being music download services akin to Apple's iTunes Store, which falls under a different copyright licensing regime, and that they have been cheating musicians out of royalties.
NMPA President David Israelite characterized his organization's legal action as a "last resort" that followed months of discussions between the entities over compensation for music creators.
XM spokesman Chance Patterson dismissed the suit as "a negotiating tactic to gain an advantage in our ongoing business discussions."
"XM pays royalties to writers and composers who are also compensated by our device manufacturers," he said in an e-mailed statement. "We are confident that the lawsuit is without merit and that we will prevail."
The music publishers are seeking an injunction that would stop the allegedly infringing behavior. They are also requesting a maximum of $150,000 in damages for each work allegedly infringed by XM. The complaint lists more than 175 well-known songs--ranging from "Let it Be" to "Like A Prayer" to "That's the Way (I Like It)"--whose rights belong to a number of large and small music publishers. The group claims those tunes represent a "small fraction" of those being illegally distributed through the XM + MP3 service.
A controversial recording industry-backed bill in Congress would require satellite and Internet radio services to restrict the ability of their listeners to record and replay individual songs. The so-called Perform Act, reintroduced this year by Sen. Dianne Feinstein (D-Calif.) has been marketed as a way to ensure that those services pay "fair market value" for the use of copyright music, but critics, including consumer groups and the electronics industry, argue that the proposal would unduly limit listeners' home-recording rights.
The suit could pose an additional hurdle as XM seeks approval of an estimated $13 billion union with Sirius Satellite Radio. During congressional hearings on the subject in recent weeks, some politicians questioned how the merged entity would reconcile reportedly different approaches to copyright matters.
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