Via the Recording Industry Association of America (RIAA), some of the biggest labels in the music industry have filed suit against XM Satellite Radio over its Inno receiver and recorder, which can save up to 50 hours of XM satellite radio programming. The labels allege that the Inno’s recording capabilities amount to "wholesale infringement" because XM has not signed a distribution agreement with the labels who own rights to the music XM broadcasts.
The suit seeks a whopping $150,000 in damages for every song copied by XM customers to their Inno devices. The suit does not seek any payments from XM customers themselves, just XM Satellite Radio.
XM argues it does not require a distribution agreement with music labels to market the Inno: they maintain the device enables consumers to tune into and record radio under well-established legal terms. Moreover, they say such distribution licensed amount to a tax on satellite radio consumers, which would raise costs and stifle innovation within the industry.
The record labels content the XM’s new device is functionally equivalent to portable music players like iPods which play music from pay-per-download and subscription digital music services. XM’s primary competitor, Sirius, has entered into a distribution agreement with record labels, as have digital music distributors Apple, Yahoo, Rhapsody, and Napster.
