Record firms sue XM satellite radio over MP3 recordings

Last Updated: Friday, January 19, 2007 | 12:52 PM ET

CBC Arts

A group of U.S. record companies is suing XM Satellite Radio Holdings Inc. over a receiver it offers with a built-in MP3 player.

A New York judge ruled Friday that the lawsuit, brought by Atlantic Recording Corp., BMG Music, Capitol Records Inc. and other music distribution companies, can proceed to trial.

The suit alleges that XM is cheating the recording companies by allowing consumers to store songs they hear over satellite radio.

XM's use of copyrighted material such as music is solely for broadcast and selling an MP3 player amounts to a means of distribution, the record distributors argue in the lawsuit.

XM has argued it is protected under the U.S. Audio Home Recording Act of 1992, which allows consumers to record music off the radio for private use.

In allowing the suit, U.S. District Judge Deborah A. Batts said she did not think the act applied.

Selling the MP3 player that can record a digital signal is different from allowing consumers to tape songs from traditional radio with an audio cassette, she said.

"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," she said.