Friday, January 19, 2007

Judge Rules In Favor Of Record Labels In XM Trial
January 19, 2007

A judge has ruled in favor of the record labels in a lawsuit with XM Satellite Radio, denying the satcater's motion to dismiss the suit and allowing the case to proceed to a trial. The suit claims that the "XM + MP3" Inno satellite receivers which allow listeners to store songs from broadcasts infringes on the labels' rights to the songs. XM claims that the Audio Home Recording Act of 1992 protects them, because it allows individuals to record music off the radio for their own usage.

U.S. District Judge Deborah Batts did not believe the aforementioned act protects the satcaster in this particular case and said that the labels license their music to XM only for airplay. She added that by allowing listeners to store songs heard on the satcaster, XM is acting as both a broadcaster and a music distributor, while it is only licensed to be the former.

XM also compares its new technology to a cassette deck recorder, but according to the Los Angeles Times, Betts stated, "It is manifestly apparent that the use of a radio-cassette player to record songs played over free radio does not threaten the market for copyrighted works as does the use of a recorder which stores songs from private radio broadcasts on a subscription fee basis."

The RIAA has released a statement in response, with EVP/General Counsel Steven Marks saying, "We’re pleased that the court has rejected XM's attempt to misuse the Audio Home Recording Act (AHRA) as a legal loophole for distributing sound recordings to its subscribers. The AHRA was never intended to allow a service offering distributions of music to duck paying creators what they are due."

He continued, "As the court stated, ‘XM is both a broadcaster and a distributor, but is only paying to be a broadcaster.’ XM directly competes with other distribution services like Rhapsody, Napster and iTunes. It only follows that they should obtain distribution licenses just as those services have. Parity among digital music services is a key issue in today’s marketplace. With convergence from every direction, it is essential that all services operate on a level playing field where fair competition can thrive. We hope this decision paves the way for resolving this case in the marketplace."