Record Labels Lose Bid to Dismiss CD Suit

Sony Corp., Vivendi Universal’s Universal Music and other music labels lost a bid to dismiss a suit alleging that the companies conspired to sell defective compact discs that don’t play on personal computers.

The record labels sought to dismiss the suit under a California law intended to prevent the suppression of free speech. The companies claim that product labels and advertising, including any alleged failure to warn, are protected by the 1st Amendment.

The suit filed last year by two consumers claimed that piracy-protection measures on CDs sold by the major labels make the discs “unreproducible or unstable” for use in many PCs and DVD players. The companies have tried to ensure that their music can’t be copied since music-swapping services such as Napster Inc. gained popularity in the late 1990s.