Suit is latest static for XM

Publishers claim copyright breach

The major music publishers added a lawsuit Thursday to the legal troubles XM Satellite Radio is facing when they sued the company, claiming that XM's service enabling customers to digitally copy songs infringes on NMPA members' copyrights.

The suit, filed in federal court in New York by the National Music Publishers Assn., alleges that XM engages in massive copyright infringement through its subscription digital music download service known as XM + MP3.

The NMPA said the suit was filed after months of discussions between NMPA and XM regarding the satellite radio company's obligation to compensate creators fairly for the songs it distributes.

"Filing a lawsuit was our last resort, but we felt that we had no choice," NMPA president and CEO David Israelite said. "We want new technologies to succeed, but it can't be at the expense of the creators of music. All that we ask is that music publishers and songwriters be fairly compensated for their efforts."

XM dismissed the lawsuit as a bargaining chip.

"The lawsuit filed by the NMPA is a negotiating tactic to gain an advantage in our ongoing business discussions," the company said.

The NMPA represents music publishers and their songwriting partners, who are dependent on copyright protection to keep making music. The plaintiffs in the suit are Warner/Chappell Music, Sony/ATV Music, Viacom's Famous Music and EMI Music Publishing.

The complaint seeks a maximum of $150,000 in statutory damages for each work infringed by XM and lists more than 175 songs as a "small fraction" of those being illegally distributed through the service. Among the songs are such well-known works as "Let It Be," "My Heart Will Go On," "Me and Bobby McGee" and "Like a Prayer."

The music publishers allege in the lawsuit that XM operates an unlawful download service that delivers perfect digital copies of copyrighted recordings to its subscribers. The XM + MP3 service allows users to record and store individual songs on portable music players at the touch of a button, creating extensive permanent libraries for as long as the user remains an XM subscriber. The NMPA claims that the service also allows subscribers to create personal playlists and automatically record large blocks of programming from which favorite tunes can be cherrypicked and permanently retained for replay. XM, which is alleged to compete with Apple's iTunes and other legitimate download services, urges its subscribers to "Hear It, Click It, Save It!"

"XM has been profiting at the expense of others," said Debra Wong Yang of Gibson, Dunn & Crutcher Llp., the lead attorney on the case. "The XM + MP3 service constitutes pervasive and willful copyright infringement to the overwhelming detriment of copyright holders, legitimate online music services and, ultimately, consumers."

XM contends that the NMPA failed to mention that the company pays millions in royalties each year.

"XM pays royalties to writers and composers who are also compensated by our device manufacturers," the company said. "We are confident that the lawsuit is without merit and that we will prevail."

Last year, the record labels filed a similar copyright-infringement lawsuit against XM on behalf of its record label members. Earlier this year in the RIAA suit, a federal judge ruled against XM on its claim that the Audio Home Recording Act gave the company immunity from following copyright law.

While XM does pay royalties for the performance of songs, copyright holders contend that the license they negotiated with the company doesn't include digital recordings.
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