Says It Protects Copyrights

The chief executive of portrayed himself and his company as a friend of the music companies as a trial began to decide if the company willfully violated the copyrights of record companies.

Michael Robertson said on Monday that his San Diego-based music storage venture is a rare Internet music company, forcing people to pay musicians for their work.

U.S. District Judge Jed Rakoff, who is hearing the civil case without a jury, earlier this year ruled that infringed the copyrights of the nation’s major record companies by offering music online without permission.

Purposeful Infringement?

Now, he must determine whether the company purposefully infringed the copyrights, which increase potential damages, to be determined at a separate trial later this year.

Since Rakoff’s earlier ruling, four of the five major record companies reached settlements with, leaving only Universal Music Group as a plaintiff. The terms of the settlements with Warner Music Group, BMG, EMI and Sony Music Entertainment were not disclosed.

“There’s a lot of chaos on the Internet with digital music,” Robertson told Rakoff. “I thought it was important that there be compensation for the copyright owners.”

“Why did you care?” Rakoff asked him.

“I’m trying to grow a long-term business,” Robertson responded. “We thought this was a responsible system that would grow the music industry.”

Robertson said the company went to great lengths to develop software that would require customers to prove they already own CDs before they were permitted to hear their favorite tunes over the Internet.

Proving Ownership With caused a stir in early January when it began the listening service, which allows customers to hear CDs from anywhere once they prove they own them by inserting them into a computer CD slot.

Robertson proudly demonstrated the service Monday, playing bits of the Steve Miller band and Stevie Ray Vaughn in a courtroom darkened so everyone could view a computer screen of’s Web site projected like a movie.

At one point, a legal document warning customers that it is illegal to copy CDs or otherwise infringe on copyrights was flashed onto the large white screen.

The judge questioned whether many customers actually read the “boilerplate, five-page, single-space legal agreement.”

If so, Rakoff suggested as he gestured toward the courtroom windows and the East River and Brooklyn Bridge beyond them, “there’s a bridge right out there that I’d love to sell you.”

The judge then asked Robertson if he truly believed his customers read the legal agreement warning them not operate the program illegally.

“I would have to agree with your honor and, secondly, I don’t want to buy the bridge,” he said.

Robertson resumes his testimony today.