The My.MP3.com service was launched in January 2000. The company
built up a library of popular CDs, copied them onto a server
accessible from its web site and invited subscribers to customise
and download the music files from any location. In an attempt to
avoid copyright infringement, subscribers were required to either
demonstrate that they already owned any of the CDs from which they
wanted to download MP3 format tracks or purchase the CDs from an
on-line retailer co-operating with MP3.com.
However, the precautions were insufficient. When the company was
sued for copyright infringement by the Recording Industry
Association of America (RIAA), Judge Jed S. Rakoff said MP3.com was
simply replaying for the subscribers converted versions of the
recordings it copied, without authorisation, from copyrighted
CDs.
In yesterday’s settlment, in addition to a $20 million payment
by MP3.com for past violations, the companies announced that
MP3.com has entered into a non-exclusive, North American license
with Sony for use of Sony’s music in the My.MP3.com service.
"Sony Music Entertainment strongly enforces its copyrights. This
settlement affirms and upholds the right of copyright owners to be
paid for the use of their works on the Internet," said Al Smith,
Senior Vice President, Sony Music Entertainment. "Sony Music has
always understood that changes in technology create new ways for
consumers to experience entertainment. This licensing agreement
with MP3.com is one of a number of initiatives that we have
underway to enhance music fans' experience in an environment that
protects intellectual property rights."
"This settlement and licensing agreement is a business
resolution that we believe will positively impact the future of
online digital music," added Robin Richards, president of MP3.com
and who has served as chief negotiator during settlement talks.
"The leveraging of MP3.com's technology infrastructure with Sony
Music Entertainment's tremendous content means that consumers are
closer to getting what they've been asking for - a powerful,
easy-to-use on-line listening experience."
MP3.com is due back in court from 28th August to determine
whether it wilfully infringed on copyrights of major record
companies by letting people store copied songs on its computers,
notwithstanding the out of court settlement with Sony and others.
The company is still trying to reach a settlement with Universal
Music Group.
