MP3.COM TRIAL BEGINS
It's white-knuckle time at MP3.com… again.
After settling with all but one of the major-label plaintiffs in the copyright-infringement suit filed against it, the besieged netco entered the Southern District Court of New York today to face the remaining litigant, Universal Music Group. This week's proceedings are set to determine whether MP3.com willfully infringed copyright in creating the database for its My.MP3.com service.
This issue will be determined by Judge Jed Rakoff. MP3.com management's discussions with lawyers on the legality of the disputed service prior to its launch are subject to attorney-client privilege and therefore not admissible. However, the very fact of their suppression suggests possible knowing culpability.
Even as company chieftain michael robertson',390,400);">michael robertson',390,400);">Michael Robertson took the stand today, sources revealed that talks continued furiously behind the scenes between MP3.com and UMG.
At stake is the amount per album to be paid in damages for the Web/technology company's illicit use of some 11,000 UMG CDs used in the creation of the database.
The two sides are said to be close to a deal, and some insiders believe a settlement could be reached before Seagram head edgar bronfman',390,400);">edgar bronfman',390,400);">Edgar Bronfman Jr.'s testimony, which is slated for Wednesday (8/30).
Settlement talks pit MP3.com reps Robin Richards and Gary Stiffelman of Ziffren, Brittenham, Branca and Fischer LLP against the UMG team.
Publishers' rep the Harry Fox Agency has also sued the online innovator, though predicters predict that a settlement with UMG would prompt the labels to pressure HFA to follow suit.
Estimated fees per disc range from $750 to $150,000; if damages are set at the maximum, MP3.com would be liable for a whopping $1.65 billion. At $10,000 per disc, meanwhile, the netco would pay a mere $110 million. At $750 per CD, the bill would come to $8.25 million.
The Associated Press reported that while on the stand, Robertson acknowledged "chaos" in the digital-music world and testified, "I thought it was important that there be compensation for copyright owners." Judge Rakoff then asked "Why did you care," to which Robertson replied, "I'm trying to grow a long-term business. We thought this was a responsible system that would grow the music industry."
Rakoff also reportedly asked Robertson if he thought site users actually read the "boilerplate, five-page, single-space legal document" cautioning them about copyright, adding that if he did, "there's a bridge out there that I'd love to sell you." The judge then motioned toward the window, in the general direction of the Brooklyn Bridge.
MP3.com stock closed down 7/32 today at 8 7/8.
