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Recording Industry Sues StreamCast

The recording industry is suing the company behind the Morpheus music file-sharing service, alleging it illegally copied thousands of copyright songs as part of a venture to broadcast music over the Internet.

The record companies filed their complaint against Bellevue, Wash.-based StreamCast Networks Inc. in federal court in Nashville, Tenn. The industry seeks $150,000 in damages for every copyright work illegally copied in addition to punitive damages.

The move comes less than two months after a federal judge in Los Angeles presiding over a separate lawsuit ruled StreamCast and Grokster Inc., another file-sharing service, were not liable for the sharing of copyright works by users of their services.

The industry blames piracy, both the sharing of song files and illegal reproduction of music through CD burning for a three-year slide in sales, and has taken legal action against companies and individuals it suspects of music piracy.

Charles S. Baker, an attorney for StreamCast in Austin, Texas, said Tuesday the company did nothing wrong and characterized the suit filed last week as an attempt to harass StreamCast following the industry’s loss in the file-sharing lawsuit.

“They lose in Los Angeles and they file a new lawsuit in Nashville,” Baker said. “We believe we were compliant with the law.”

A message left with StreamCast officials was not immediately returned.

The Recording Industry Association of America, which often speaks on behalf of the industry, released a brief statement on the lawsuit: “This is another step in our ongoing litigation against StreamCast, a company that we believe is responsible for widespread copyright infringement.”

A spokesman for the trade group who could discuss the case was not immediately available.

StreamCast’s original plan was to stream music over the Internet. To do so, StreamCast and its predecessors, MusicCity.com and Infinite Music Inc., copied thousands of songs from CDs and converted them into digital form without obtaining a license from the music labels, according to the suit.

StreamCast then created huge databases of digitized songs, copied it onto several computers and played the songs for the public without permission, the suit states.

Baker said StreamCast obtained some licenses, including one from the American Society of Composers, Authors and Publishers, but the recording companies would not give their permission.

Still, Baker said, the copyright laws on Internet broadcasting were not well defined at the time.

“It wasn’t very clear what the various parties’ rights and responsibilities were,” he said. “(The recording companies) are taking a position that we should have gotten a license before we converted the CDs into digital. I’d like you to find a company that did that at that time.”

Ultimately, the Internet music radio venture never got off the ground, Baker said.

StreamCast, which is no longer doing business in Nashville, had not yet responded officially to the suit Tuesday. Baker said the company would seek to have the suit brought as a related case to the file-sharing lawsuit before the federal court in Los Angeles. That case is in appeal.

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