RIAA to MP3.com: See You in Court

On January 17, we reported a new service by MP3.com in which it would store, on its site, digital copies of tunes purchased by music lovers for them to access from any location. Beverly Hills attorney Ken Hertz, who sometimes consults with MP3.com, said he would be "surprised if the recording industry didn't sue," despite glowing statements from MP3.com chief Michael Robertson about all the benefits and new sales the recording industry would enjoy from his venture into uncharted waters.

Mr. Hertz might have enjoyed a quick windfall by betting on his own hunch. Only a few days later, the Recording Industry Association of America filed a copyright-infringement lawsuit against MP3.com, claiming that the latter's new service is a copyright infringement because the company does not own the music and is offering the music without permission. A statement from RIAA senior VP and general counsel Cary Sherman called the new service "a blatant infringement of rights, upsetting not only to record labels, but also large numbers of artists, retailers, and technology companies who have business agreements with copyright owners."

Michael Robertson said he had not had a chance to review the suit, but promised to take the fight as far as needed in order to prevail. "We have every intention of fighting this to the court of last resort, if necessary," he said in a prepared statement. Robertson's defense will likely be that MP3.com's Instant Listening Service and Beam-it are protected under "fair use" provisions of copyright law, which allow music lovers to transfer material they legally own to other media for their own enjoyment—for example, copying a CD onto a cassette tape for play in the car. "Fair use" does not extend such rights to commercial duplicators, or even to private individuals who make copies for friends. MP3.com users can listen to a CD after they have purchased it, and can "beam" CDs they already own to the company, adding them to a "personal playlist" residing on an MP3.com server computer.

Attempts by RIAA officials, including president Hilary Rosen, to negotiate with MP3.com went nowhere, hence the lawsuit. Rosen characterized MP3.com's behavior as "reckless disregard of the law." Copyright law, Rosen noted, "was not invented just to protect the interests of companies. . . . It exists to protect the creative talent of the many artists this culture has fostered and the investment in their work. Simply put, it is not legal to compile a vast database of our member's sound recordings with no permission and no license." MP3.com does not require proof of ownership of any CD a subscriber "beams" to the server. The company says it plans to begin compensating artists for their work distributed via its "streaming" technology. The lawsuit was filed in a New York district court on Friday, January 21.