Suit against XM may proceed

A lawsuit in which record companies allege XM Satellite Radio Holdings Inc. is cheating them by letting consumers store songs in a device can proceed toward trial, a judge ruled Friday after finding merit to the companies’ claims.

U.S. District Judge Deborah A. Batts made the finding in a case brought by Atlantic Recording Corp., BMG Music, Capitol Records Inc. and other music distribution companies against the licensed satellite radio broadcaster.

In a lawsuit last year, the companies said XM directly infringed their exclusive distribution rights by letting consumers record songs onto receivers marketed as “XM + MP3” players.

XM has argued that it is protected from infringement lawsuits by the Audio Home Recording Act of 1992, which permits individuals to record music off the radio for private use. The judge said she did not believe the company was protected in this instance by the act.

Washington-based XM said it remained confident that the lawsuit was without merit and that it would prevail.

The judge said the record companies consented to XM’s use of their copyrighted material solely for the purpose of providing a digital satellite broadcasting service. By broadcasting and storing copyrighted music for later recording by the consumer, the judge said, XM was both a broadcaster and a distributor.