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Judge Rules Against Dismissing XM Suit

A record company suit against XM Satellite Radio may proceed to trial, a U.S. District Court has ruled.

Judge Deborah A. Batts found that a copyright infringement lawsuit filed by record companies last May accusing XM of turning its radio service into a music-download service without paying higher royalty rates may proceed despite XM’s motion to dismiss.

XM said of the ruling that it “remains confident that the lawsuit filed by the record industry is without merit and that we will prevail. At this stage of the proceeding, the court’s ruling is required to be based on the false characterizations set forth in the plaintiff’s complaint. The real facts strongly support our view that the lawsuit is barred by the Audio Home Recording Act. We look forward to making our case in court.”

The suit against XM cites the Pioneer Inno and seeks a permanent injunction preventing some of the recording functions of the headset XM/MP3 player. It also seeks damages of $150,000 maximum for each song recorded by the Inno and similar devices plus punitive damages. The suit was filed by Atlantic Recording, BMG Music, Capitol Records and other music companies.

The suit does not seek to keep the Inno or similar devices off the market entirely, but wants to block their ability to disaggregate songs recorded in their memory buffers.

The Consumer Electronics Association (CEA) also issued a statement in response to the ruling today referring to legislation in Congress that would force satellite radio broadcasters to limit consumers’ ability to record satellite radio programming and would raise the royalties that the companies pay to copyright holders.

The CEA stated, “With the motion to dismiss denied, it would be premature for Congress to act on this issue while the judicial process moves forward. Music lovers across the country are adopting innovative digital technologies to enjoy their lawfully acquired content where and when they want; we urge that they won’t be disenfranchised and business models will adapt to better serve today’s digital customers.”