Record Company Universal Streams Music, Gets Sued

Universal Music's recent victory in a copyright
infringement lawsuit against MP3.com made it clear that the
recording giant - and not the Internet music distributor - holds
the right to make copies of the songs on its CDs.

But when Universal itself is broadcasting those tracks on the Web,
it should be paying music publishers and songwriters - just like
radio stations do - according to a lawsuit launched this week
against the Seagram-owned company behind such well-known labels as
Decca, MCA, Motown, Philips, and Polydor.

A number of those publishers and songwriters, including Jerry
Leiber and Mike Stoller, Irving Berlin Music Company and Elvis
Presley Music, are seeking up to $150,000 for each of their works
served up by Universal from the site of its Internet record label,
Jimmy and Doug's Farmclub.com.

Farmclub.com recently launched a Beta-test version of a music-
subscription service, boasting that 25,000 songs from the huge
Universal library were available for listening on demand.

Based on streaming-audio technology, the service aims to please
music fans without actually handing over high-quality digital-audio
files listeners can permanently store on their own computers and,
perhaps, distribute through the Napster-like file-sharing networks
feared by the industry.

But artists say streaming audio is akin to radio play and that they
should receive royalties for any Internet broadcasts.

Battles over royalties for digital-audio rights and streaming
technologies have divided music companies that were on the same
page when it came to fighting Napster, or the former video- and
audio-swapping service Scour.

Earlier this week, New York District Court Judge Jed Rakoff, who
recently awarded Universal more than $50 million in its lawsuit
against MP3.com, exonerated both those companies and most of the
other major record companies in a lawsuit brought by a group of
artists that included The Coasters, The Original Drifters and The
Chambers Brothers.

The artists said the recording companies and MP3.com had no rights
to make digital versions of their music and distribute it over the
Internet.

In his ruing Tuesday dismissing the case, Rakoff noted that all the
artists had signed contacts containing language "identical or
equivalent to the following: All recordings, phonograph record
masters and reproductions made therefrom, together with the
performances embodied therein, shall be entirely (the record
company's) property. (The record company) shall have the
unrestricted right to manufacture, use, distribute and sell sound
productions of the performances recorded hereunder made by any
method now known, or hereafter to become known."

Said Rakoff: "This language ... is clear. Without limitation it
conveys all of (the artists') rights in these recordings to the
record companies, including the right to exploit the recordings by
any method whatsoever."