RIAA Sues XM Over Handheld Player/Recorder

inno.gifThe RIAA is suing XM Satellite radio over the company’s refusal to pay another set of license fees for storage of music on portable devices. The suit, filed Tuesday in New York federal court, centers on XM’s new portable device, the $399 Inno from Pioneer; the RIAA claims the ability to record from XM and store music on the MP3 player is “massive wholesale infringement.” XM Chairman Gary Parsons has said he believes the company he shouldn’t have to pay another fee in addition to the performance fees XM already pays. XM also contends that because the music to record isn’t available on demand it should be treated like a vcr, not like an iPod. XM said it will vigorously defend the suit.
After some posturing, XM competitor Sirius avoided similar action by agreeing earlier this year to pay license fees for its MP3/satellite combo.
AP: The RIAA wants $150,000 in damages for every song recorded to the device by XM users.
— All in all, not a great day for XM, which also has to deal with class-action suits filed today over subscriber acquisition costs and the halted shipment of an Audiovox model over claims ofterrestrial radio interference.
Update: Timing is everything … The Inno comes up short in a Walt Mossberg review in Wednesdat’s WSJ. “… its spotty reception, confusing software and monthly fee make the Inno a no-go, except for hard-core XM fans.”
Related: Earnings: XM Posts Wider Than Expected Q1 Loss; Reaches 6.5 Million Subs
Sirius, EMI Settle On Music Player Controversy

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