NEW YORK - XM Satellite Radio Holdings Inc. yesterday said it has settled a patent-infringement lawsuit filed by Universal Music Group and hopes to reach deals with the other music companies.
The dispute centers around XM's portable Inno device, which can store and record music from satellite radio.
Major music labels, including Vivendi's Universal, Warner Music Group Corp., EMI Group PLC, and Sony BMG, sued XM in May 2006, saying the Inno infringes on copyrights and transforms a passive radio experience into the equivalent of a digital download service, such as Apple Inc.'s iTunes.
XM said yesterday that it reached a multiyear deal with Universal, which will withdraw from the complaint. It said the pact covers all XM radios with advanced recording functions, including future products. XM did not give the financial terms.
"We look forward to continuing our discussions with the other music companies in hopes of arriving at a resolution that benefits everyone, especially consumers," XM said in a statement.
Warner Music, EMI, and Sony BMG, a joint venture between Sony Corp. and Bertelsmann AG, all declined to comment.
Warner Music is in talks with XM to try to settle the dispute and expects a resolution soon, said a source familiar with the matter who spoke on condition of anonymity.
Janco Partners analyst April Horace said the Universal agreement would probably be followed by others. "Once you've created a precedent in how to resolve that issue, I think it's easier to resolve the others," Horace said.
The original lawsuit, filed in federal court in New York, accused XM Satellite of "massive wholesale infringement" and sought $150,000 in damages for every song copied by XM customers using the Inno, which went on sale last year.
"We are pleased to have resolved this situation in an amicable manner," Universal Music's chairman and chief executive, Doug Morris, said in a statement.
XM, with more than 8.5 million subscribers, is waiting for regulatory approval to merge with the number two satellite radio company, Sirius Satellite Radio Inc. Sirius already has a deal with the recording industry.
XM shares closed down 64 cents to $12.91. Sirius shares fell 16 cents to $3.15.
rising
falling 