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"We have the right to exclude [MP3.com] from this business. They envisioned a potential market that belongs to [the record labels]."
—music industry lawyer Katherine Forrest
RIAA, MP3.COM SUIT HEARD
Judge Will Rule On Summary Judgment April 28
MP3.com's controversial streaming-music services illegally interfere with the major record labels' eventual plans to make their catalogs available online as streaming files, record industry lawyers alleged in court Friday.

During a summary judgment hearing in the case of the Recording Industry Association of America vs. MP3.com, music industry lawyers argued that MP3.com's Instant Listening and Beam-it services are violating copyright laws.

They asked a federal court judge to deliver a judgment against the site, a move that would help bring a quick end to the lawsuit, which was filed in January.

"What you're saying is that if there's money to be made on your [music online], you're the ones who should make it," said Judge Jed Rakoff.

Rakoff, who listened to three hours of arguments on the case Friday, said he would announce his ruling on the summary judgment motion April 28.

MP3.com's services allow users who prove they possess a popular CD to listen to streaming versions of the music on that CD from MP3.com's servers. Users show possession by placing the disc in their computer where it is read. The disc's title is then transmitted to MP3.com, where it is added to the user's account, thereby enabling the user to listen to the disc's tracks from any computer with an Internet connection.

Stephen Neal, a MP3.com lawyer, accused music industry lawyers of trying to deny the company the right to have their case properly heard in court. "They don't want to embrace fair use [of their copyrights]; they don't want to embrace a fair trial," he said.

Lawyers on both sides, as well as the judge, agreed that much of the case rides on the question of whether MP3.com's streaming services are depriving record labels of income.

Neal argued that since the services require users to prove they have a CD before listening to the music on it, they would actually increase CD sales. But music industry lawyers refused to concede that point, and also explained the labels' plans to offer streaming services of their own, which they said are threatened by MP3.com's services. "We have the right to exclude [MP3.com] from this business," music industry lawyer Katherine Forrest said. "They envisioned a potential market that belongs to [the record labels]."

Though the judge cautioned that he had not made any final decisions on the case, a number of his comments from the bench suggested that he was skeptical of some of MP3.com's claims. He disputed Neal's assertion, for instance, that the company is simply storing CDs that consumers already own, since the company plays music from an archive it created of at least 40,000 CDs in the form of streaming MP3 files.

If MP3.com loses this case, the company's fines could range from $750 to $30,000 per copyright violation, which could mean penalties in the hundreds of millions or even billions of dollars.

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