Recording industry sues satcaster over Inno

The recording industry has sued XM Satellite Radio to block the use of a digital song storage device that works like an iPod.

The four major distribs filed suit in New York on Tuesday, accusing XM Satellite of “massive wholesale infringement” and seeking $150,000 in damages for every song copied as part of the satellite radio company’s XM + MP3 service.

Last month, XM introduced the service and the Inno device, which works like an iPod and can store up to 1,000 songs recorded off XM stations. Company plans to introduce two other, similar recording devices, the Helix and Nexus.

In its lawsuit, XM said, “The service is not designed for the purpose of permitting users to listen to a program at a more convenient time.” Instead, XM asserts, device users may potentially never purchase another recording knowing that they can record off a satcast.

“XM is playing a legal shell game by trying to morph a broadcast service into an ownership device,” Mitch Bainwol, chief executive for the Recording Industry Assn. of America, said in a statement. “They are attempting to compete with an iTunes or Rhapsody model while bypassing the compensation made by those and other services to the music community.”

XM responded by stating, “The music labels are trying to stifle innovation, limit consumer choice and roll back consumers’ rights to record content for their personal use. This is a negotiating tactic on the part of the industry to gain an advantage in our private business discussions. … XM will vigorously defend this lawsuit on behalf of consumers.”

XM has said it will not pay for distribution licenses required of Internet downloading services like Apple’s iTunes. The satellite radio service’s rival, Sirius, has agreed to pay for the licenses to cover similar gadgets for its service.

“As we continue to transform our business model, the integrity of the digital marketplace is more important than ever,” Bainwol noted. “Everyone must play by the same set of rules and fairly compensate labels, artists, songwriters and publishers.”

XM execs noted the radio company is the largest single payer of digital music broadcast royalties, and royalties paid by XM go to the music industry and benefit artists directly.

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