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UMG settles with XM Radio

Other nine labels still suing over infringement

Universal Music Group has settled its claims against XM Satellite Radio in an infringement lawsuit over a portable recording device the satcaster sells.

Neither company disclosed exact terms of the settlement, which includes a confidentiality clause, except to say in a joint announcement:

“As part of the agreement, UMG becomes the first music company to reach a multiyear deal covering all XM radios with advanced recording functionality, including both those currently available as well as future product releases.”

UMG joined the other major labels in May 2006 to sue XM over its Pioneer Inno, a portable digital device that can be programmed to record specific songs as well as artists when they are played. UMG has now withdrawn from the suit, while XM is “still talking” to the others that remain party to it, according to a company spokesman.

In the suit, plaintiffs charged XM with “massive wholesale infringement” of their copyrighted songs because the Inno’s “advanced recording” capabilities effectively constituted distribution, for which XM is not licensed.

Rival satcaster Sirius sells a similar device to subscribers, but Sirius long ago negotiated a deal with the labels to do so. XM refused, arguing in part that the Audio Home Recording Act obviated the need for any agreement or license.

Earlier this year, XM and Sirius announced their intention to merge. Government regulators are still reviewing the proposal, but observers have speculated that the Inno lawsuit would have to be settled in one way or another as a precondition for a federal blessing of the deal.

“We are pleased to have resolved this situation in an amicable manner,” said UMG chief exec Doug Morris in a statement.

“Our agreement is a win for everyone involved, especially for consumers,” said XM prexy-chief Nate Davis.

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