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MP3.com Signs a Musical Truce

Music site makes peace with record label but Napster still fights it on

MP3.com, which was recently found liable for infringing copyright law, has
claimed a small victory in its battle for legal legitimacy. The company has
reached a licensing agreement with Broadcast Music (BMI) to let MP3.com
potentially offer 45 million BMI songs on its site. The news follows Napster's
recent major setback in an MP3-related case.

Napster lost a motion for summary judgment as part of its defence of a lawsuit
by the Recording Industry Association of America. Napster's software allows its
users to find and swap MP3 files on the Web. A San Francisco judge rejected
Napster's motion, in which the company claimed it acted only as a "conduit" for
information. As a result, the suit will go to trial.

Napster will claim, among other things, that many songs are authorised for
distribution over Napster.com, says Laurence Pulgram, Napster's attorney. The
RIAA hopes to nip in the bud what it considers Internet piracy and copyright
violations. Recording artists and their record companies are increasingly
angered by what they call unauthorised use of their work by the likes of Napster
and MP3.com.

MP3.com sustained a legal defeat in April at the hands of the RIAA, which
claimed MP3.com violates copyright laws by letting people download
copyright-protected songs from its Web site. The RIAA is seeking £95 thousand in
damages for each title MP3.com has in its database -- amounting to billions of
pounds.

A New York District Court judge ruled that MP3.com is liable for copyright
infringement, but damages have not yet been determined.

Meanwhile, MP3.com's agreement with BMI is a bright spot in the company's
interaction with the music establishment. It concerns the MyMP3.com service,
which enables users to download songs from personal accounts on the site.

The licence covers performing rights for songs, but not other copyright
interests or other copyright holders, such as record companies, according to
BMI. Thus the pact does not cover, for example, "mechanical" rights--the
copyright for a specific recording of a song that is owned by a record label,
according to an MP3.com official.

The licence does cover a recorded performance of a song as long as the composer
hasn't relinquished the copyright for that particular recorded performance, the
MP3.com official says. The BMI pact could also let MP3.com offer recordings
performed by artists other than the composer, if performance copyrights are not
held.

The MyMP3.com service is at the heart of the RIAA's lawsuit. The MP3.com
software matches music CDs that people put in their PCs with CDs stored in
MP3.com's library. MP3.com software asks whether they already own the CD, then
lets them access that music from the MP3.com library. The RIAA contends the
method of verification provides inadequate copyright protection.


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