RIAA Sues XM Satellite Radio Over Recording Device; Stock Drops 5.7%

Authored by dmw on May 17, 2006 - 4:54pm.

Washington - The Recording Industry Association of America (RIAA), which represents the interests of the major record labels, has filed a high-profile lawsuit against XM Satellite Radio over a new satellite device that allows users to store songs for play later. XM's stock dropped 5.7% on Wednesday. The device in question -- called the Inno, and manufactured by Pioneer -- allows users to store songs they hear through the XM radio service, similar to the way TiVo enables recording of TV shows. In the lawsuit, the recording industry argued that satellite radio services are only licensed to provide their listeners with "live" songs heard on the radio service, and such recordings constitute a "sale" of a permanent copy of the songs. The lawsuit is asking $150,000 in damages for each song copied by customers of XM Satellite using the Inno. XM told Reuters the suit is also a tactic in licensing negotiations for the device, which sources familiar with the matter told Reuters have failed to generate an agreement.
http://biz.yahoo.com/ap/060517/xm_satellite_mover.html?.v=1
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