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U Music seeking $825 mil against MP3.com

Site could pay between $200 to $150K per unit for 5500 albums

NEW YORK — Seagram’s Universal Music Group, the world’s largest record company, went back into court Monday to seek as much as $825 million in damages from online music company MP3.com in a copyright infringement suit.

A U.S. District Court ruled in April that San Diego-based MP3.com broke copyright law by creating a database of over 80,000 albums, which when combined with its software, allows users to store music digitally and then access it via any computer. The service is called My.MP3.com.

Time Warner’s Warner Bros. music group; Sony Music Entertainment; BMG, the music unit of Bertelsmann; and EMI Group have all reached settlements with MP3.com that allow their music to be used in the database.

Universal, home to such artists as No Doubt, Jay-Z and Limp Bizkit, is the only major label not to strike a deal. A trial to determine the damages MP3.com must pay could stretch into November before all of the legal technicalities are sorted out — unless a settlement is reached before then.

Richards said his company could be held liable for infringing on as many as 5,500 Universal albums, although it will challenge U’s claim on many of those albums on technical grounds.

Worst case scenario for MP3.com is that the court could find that the company violated the law with “willful intent,” which would give the presiding judge, Jed Rakoff, powers to impose damages totaling as much as $150,000 per album, Rakoff said from the bench.

Rakoff said the best case scenario is innocent intent, which imposes damages of $200 per album for a more manageable total of $1.1 million.

In its settlements with the other four labels, MP3.com agreed to pay each label about $20 million in damages. It would also pay a fee each time one of the label’s albums is registered by a user and another fee each time a user accesses one of its songs.

MP3.com took a $150 million charge against its second quarter earnings for estimated lawsuit costs.

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