Judge limits MP3.com copyright settlement payout

Damages limitation exercise

MP3.com may not suffer as much as it expected to after losing a copyright violation suit brought against it by the Recording Industry Association of America earlier this year.

The trial judge, US District Judge Jed S Rakoff, this week ruled that when it comes to calculating the damages MP3.com must pay to music labels only the number of CDs it used, not the number of songs, will be taken in account.

That could cut the amount MP3.com has to pay out by a factor of ten. Each copyright MP3.com has infringed could lead to statutory damages anywhere between $750 and $30,000. Since, MP3.com had up to 80,000 CDs in its database, you can see why it might well breathe a sigh of relief that damages will be limited to discs not songs.

MP3.com has spent the months since the trial, which took place in April, negotiating with the major labels, on whose behalf the RIAA brought the suit. Earlier this week, the company settled with Sony, paying an undisclosed sum to settle the case and to license the label's catalogue. Last month it struck a similar deal with EMI, following arrangements with BMG and TimeWarner. Some industry observers claim MP3.com has paid each company $20 million.

That just leaves Universal to settle with, but a deal can't be too far off, possibly even before the 28 August hearing at which MP3.com's damages will be decided.

The hearing follows Judge Rakoff's verdict that MP3.com's 'virtual CD player' service, MyMP3.com, which allowed CD owners to listen to their library of discs from any PC, anywhere, did infringe copyright holders' rights, even though the listener had a legal right to copy their own albums for personal use. MP3.com's mistake was to build a commercial operation out of the service. ®

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