Three Big Record Labels Refuse to Back Off

Future of mp3.com in Question

CEO Robertson asks Netizens to Help

After settlements with Warner and BMG it looked like mp3.com might just dodge the bullet. It seemed logical. mp3.com is ethical, honest and really trying to be an all ally of the music industry. But logic does not prevail in the mysterious world of the RIAA.

On July 10, 2000 EMI Music, Sony Music and the Universal Music Group, three of the Big Five record companies, turned up the heat on MP3.com, insisting there would be no out-of-court settlement. Instead they filled papers in court detailing the formal damages they are seeking from their copyright infringement lawsuit filed in January.

Back in April, MP3.com was found guilty of violating record company copyrights with its My.MP3.com locker service. While the San Diego digital music company settled out of court with BMG Entertainment and the Warner Music Group last month for a reported $40 million, EMI, Sony and Universal have pressed on with their suit.

Hearings are expected to take place July 28, 2000 and Judge Rakoff will make his decision by Aug. 28. EMI, Sony and Universal are asking the judge for the maximum amount of damages allowed by law. This would only be possible if Judge Rakoff ruled that MP3.com "willfully" violated copyrights and that the damage award should be made on a per-song basis, not per-CD.

the WIZARD would be remiss not to point out that Judge Rakoff has been remarkably hostile to mp3.com so far. In addition, consumer rights have been totally ignored in his courtroom.

Under the copyright law, "willful" violators pay up to $150,000 per infringed work. On the other hand, if the court finds that the defendant followed a "fair use" definition of copyrights, the law says the court can reduce the award of statutory damages.

The record companies argue that since every song is an independent copyrighted work, MP3.com violated the rights of each of them individually. Since the record company's original lawsuit said that MP3.com illegally copied 45,000 records for their service, at an average of 12 songs per CD, that could represent 540,000 works. Under the record companies' willful-infringement, maximum-pain plan, damages could reach a paralyzing $81 billion.

On their web site today, The Street.com reported that mp3.com had a remaining cash war chest of only $379 million.

It is possible, of course, that rulings could go mp3.com's way. If the judge rules in MP3.com's favor, the 45,000 violations at $200 a pop would only amount to $9 million. That's less than the company paid to Warner and BMG for settlements.

Not wanting to take any chances, Michael Robertson, mp3.com's energetic CEO has gone to the users of his service and asked them to assist in the ongoing debate over mp3's and copyright laws in the U.S. Congress. Here is a copy of the letter received by the WIZARD, fkap from Robertson:

the WIZARD suggests that you do get involved. Click on the above links and add you voice to the growing number of people who are tired of corporate trampling on individual rights. So far only the "big money" is being heard. The individual is lost in this battle. Join in!