Universal, MP3.com Dispute Settled
November 14, 2000 -- Today in New York, U. S. District Court Judge Jed Rakoff awarded $53.4 million in statutory damages and attorneys fees to the Universal Music Group in its copyright infringement suit against MP3.com.
A U.S. federal court ruled in April that MP3.com violated copyright law with the creation of the My.MP3.com service, a database — featuring more than 80,000 albums — in which users can store music digitally and then access it via any computer connected to the Internet.
Since that ruling, MP3.com has struck deals with four of the five major labels — Time Warner Inc.'s Warner Bros. music group, Sony Corp's Sony Music Entertainment, EMI Group Plc, and Bertelsmann AG's BMG — permitting the use of the labels' music in the MP3.com database. Universal, the largest of the five, was the only one that didn't reach a settlement with MP3.com.
But now it has. It was also announced today that Universal had granted MP3.com a non-exclusive, North American license for the use of its recordings on the My.MP3.com system. The Universal Music Group includes the record labels A&M, Interscope, Geffen, Island/Def Jam, Motown, Universal, and Verve, among many others, representing top-selling artists such as Limp Bizkit, Eminem, No Doubt, and Sheryl Crow.
"Universal Music pursued this case to send a strong message that copyrights will be protected and that copyright owners and artists need to be properly compensated for use of their work," said Universal President Zach Horowitz in a statement.
"Although we believe our proof at the trial would have led to a greater damage reward, we are satisfied with the award. It was never our intent to put MP3.com out of business with a judgment so large that it would threaten their viability as a company. We support the development of legitimate music business on the Internet."
On Sept. 6, Rakoff ordered MP3.com to cough up $25,000 per compact disc for recordings that Universal alleges MP3.com copied illegally, but the number of discs in question remained undetermined. In that earlier ruling, the judge said he could have awarded damages as high as $150,000 per disc but opted for a smaller amount because he felt that MP3.com had acted more responsibly than other Internet startups, such as Napster.
"We are glad that this case is now behind us and that we will be able to include UMG's music as part of our My.MP3.com service," said MP3.com's Michael Robertson in a statement today. "We look forward to returning our entire focus to capitalizing on the tremendous opportunity in the digital delivery of music and letting consumers listen to CDs, which they own in the digital age.
"As we move ahead, this provides clear evidence that the needs of rights holders and music fans can be accommodated in the digital music space," he added. "The marketplace that has served artists and consumers for so long will continue to thrive in the era of the Internet."