Judge Rejects MP3.com Claim

N E W  Y O R K, Aug. 30 -- A judge today rejected an accusation by MP3.com Inc. that Seagram Co.’sUniversal Music Group was using its copyright infringement claimto put the online music company out of business.

U.S. District Court Judge Jed Rakoff alsoruled as irrelevant MP3.com’s allegation that Universal, theworld’s largest record company, was unwilling to settle the suitout of court because of its own online strategy.

Rakoff ruled in April that the San Diego-based MP3.com brokecopyright law by creating a database of more than 80,000 albums,which when combined with its software, allows users to storemusic digitally and then access it via any computer. The serviceis called My.MP3.com.

Time Warner Inc.’s Warner Brothers music group, SonyMusic Entertainment, BMG, the music unit of BertelsmannAG and EMI Group Plc, have all reachedsettlements with MP3.com that allow their music to be used in thedatabase.

But Universal, home to such artists as No Doubt, Jay-Z andLimp Bizkit, is the only major label not to strike a deal,forcing a trial, which opened Monday, to determine the damagesMP3.com must pay Universal.

A Hostile Witness

Today, MP3.com’s attorney Michael Carlinski calledSeagram President and Chief Executive Edgar Bronfman Jr. as ahostile witness as he sought to portray Universal Music as afierce competitor that was trying to “put this company [MP3.com]out of business or publicly vilify” it.

Carlinski suggested to Bronfman that FarmClub.com, a Web sitecreated by top executives at Universal Music, was a directcompetitor to MP3.com. Both MP3.com and FarmClub.com offer freedownloads of music by acts that are not signed to major labelcontracts.

But Rakoff said that Bronfman and Universal’s motives in thetrial were irrelevant.

“You think Mr. Bronfman and his company have a motive toeconomically damage the defendant [MP3.com],” Rakoff said toCarlinski. “You’ve presented no evidence of that, but assumingyou did, it’s irrelevant as far as I’m concerned.