MP3 Would Pay Damages per CD, Not Song

MP3.com Inc. would face damages for copyright violations on every compact disc it infringed, not every song, if a lawsuit by record companies against the Web music site goes to trial as scheduled Monday, a federal judge ruled.

U.S. District Judge Jed S. Rakoff in New York ruled that for purposes of determining damages, the copyright works in the case are the CDs that MP3.com has made available for users to download, not the individual songs contained on those CDs, leaving the company liable for a smaller amount of damages.

San Diego-based MP3.com has settled with four of the five major record companies that sued in January. Seagram Co.’s Universal Music Group, the world’s No. 1 record company, is the only one that hasn’t struck an agreement. Analysts have predicted that one could come before Monday.

In his decision, Rakoff wrote that federal law provides for statutory damages of $750 to $30,000 for each copyright that is infringed.

In April, Rakoff ruled that MP3.com had infringed the companies’ copyrights. The court still must determine whether MP3.com’s conduct was willful and exactly how many copyrights the company violated.