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Vivendi's UMG Caught Streaming Without an Online License

26 Sep, 2001 By: Hive News

UMG Recordings Inc. infringed copyrights owned by the writers and publishers of some of America's best-loved pop, rock 'n' roll songs and standards by transmitting them over the Internet without the necessary licenses, a federal judge ruled Wednesday, according to a Bloomberg News report.

UMG does own copyrights to distribute these songs on albums and CDs, but the publishers and songwriters argued that UMG, whose labels include MCA, A&M and PolyGram Records, needed a separate license from them to transmit individual songs over the Internet.

U.S. District Judge John Martin agreed, ruling that for UMG, the world's largest music company, the "choice is to obtain a license... and pay the fee or cease their infringing activity."

Edward Murphy, president of the National Music Publishers Association, representing the group's 27,000 publishers and 150,000 songwriters, said, "It sends a very clear message to all those who intend to use music that youneed the approval of copyright owners before you use their music."

UMG said it would appeal the ruling.

A Bloomberg analyst said the ruling could be costly to UMG but would have only a limited impact on rival services MusicNet and Pressplay. MusicNet is a joint venture of AOL Time Warner Inc., Bertelsmann AG, and EMI Group Plc. Vivendi and Sony Corp. are partners on Pressplay. Neither service is up and running yet.

"Both Pressplay and MusicNet said they're working towards similar agreements" to Napster's," the analyst told Bloomberg. Earlier this week, Napster agreed to pay songwriters and music publishers $26 million to settle a copyrght infringement suit -- plus a $10 million advance against future royalties to license their music as once-notorious Napster transforms itself into a subscription-based Internet service.

Prominent music publishers and songwriters, including Elvis Presley Music andPaul McCartney's MPL Communications, sued UMG last year after it launched the Farm Club Online Inc. to stream music over the Internet for paid subscribers. The site has since been incorporated into UMG's GetMusic.

According to Bloomberg, the ruling was limited to the infringement issue and did not address damages. Murphy said the plaintiffs would seek millions in damages and that the decision sets a precedent affecting many more copyrights.

Some of the classic works infringed upon include "Love Me Tender," "Jailhouse Rock," "My Favorite Things" from The Sound of Music, "Peggy Sue," "White Christmas" and dozens more, the songwriters and publishers claim.

Last year, UMG, then owned by Seagram Co. Ltd., persuaded a different New York federal judge that Internet music provider MP3.com Inc. infringed UMG's copyrights by disseminating its music over the Internet. Vivendi subsequently absorbed Seagram and MP3.com.

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