NEW YORK – U.S. District Court Judge Jed Rakoff issued a ruling that MP3.com, Inc. willfully infringed Universal Music Group’s copyrighted works in connection with the company’s My.MP3.com service, which was designed to enable consumers to listen online to the CDs they purchase.
The court also set the statutory damages amount that Universal could potentially recover from the case at $25,000 per CD, a penalty that could reach as much as $250 million.
U.S. District Judge Jed S. Rakoff said it was necessary to send a message to the Internet community to deter copyright infringement.
Rakoff said some Internet companies “may have a misconception that, because their technology is somewhat novel, they are somehow immune from the ordinary applications of laws of the United States, including copyright law.”
MP3.com said it intends to appeal the ruling. “We believe that everyone should have the right to listen to the music they purchase, even if it’s on the Internet,” said Michael Robertson, chairman and chief executive officer of MP3.com. “While we respect the court, we disagree with the court’s decision and we look forward to taking our case to the Court of Appeals.”
MP3.com upset the record companies in January when it began the MyMP3.com listening service, which allows customers to hear CDs from anywhere once they prove they own them by inserting them into a computer.
Shares of MP3.com were halted at $7.88 on the Nasdaq Stock Market before the decision. When trading resumed 2 1/2 hours later, the shares plummeted 27% to $5.77 in after-hours trading.
