by Mike Masnick
Mon, Dec 17th 2007 11:16pm
In a bit of unfortunate news, it appears that XM has given in and decided to settle its dispute with the record labels. The company has already settled with Universal Music, with the other major labels expected to quickly follow suit. The Reuters article incorrectly states that this was a patent infringement suit (fact checking, anyone?) but it's actually a copyright issue, where the record labels were using copyright to try to prevent XM from innovating. Specifically, XM has a license so it can play music from the record labels and it fairly pays all the royalties required. The problem, though, was that XM decided to introduce a new device, the Inno, that allowed XM subscribers to record songs and listen to them later. That's a perfectly legitimate use -- and the courts have backed up the fact that "time shifting" by recording programs is perfectly legal. Not so, according to the RIAA, who suddenly felt that because people could record the music from XM, XM now had to pay another licensing fee on top of the licensing fee it already paid. This went directly against what the RIAA had said earlier, when it promised that it would never use copyright laws to prevent new technologies like the VCR, TiVo or the iPod. The Inno clearly fits in as a device just like that... and yet, here was the RIAA demanding extra money to allow such a device to exist. It's really too bad that XM wouldn't continue this fight in court, as it's clearly on the right side -- but with its economic troubles and the impending merger with Sirius, it looks like the company decided it was easier to just pay off Doug Morris and his cronies to leave it alone. Chalk another short-term victory up for Morris, who continues to do everything possible to win in the short-term at the expense of the long-term.
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