MP3.com immediately said that it would appeal the ruling from US District Judge Jed S. Rakoff.
Rakoff said that MP3.com can be required to pay damages of at least $US118 million, or $US25,000 for each of Universal's estimated 4,700 CD collection, according to the judge's ruling. That figure could go up or down, depending on the number of "qualifying CDs" that will be determined in the final phase of the trial in November, he said.
Rakoff clearly stated that MP3.com willfully violated the copyright and did it with financial gain in mind.
"There is no doubt in the court's mind that the potential for huge profits in the rapidly expanding world of the Internet is the lure that tempted an otherwise generally responsible company like MP3.com to break the law, and that will also tempt others to do so if too low a level is set for the statutory damages in this case," Rakoff wrote. "Some of the evidence in this case strongly suggests that some companies operating in this area of the Internet may have a misconception that, because their technology is somewhat novel, they are somehow immune from the ordinary applications of laws of the United States, including copyright law."
Universal has said that it wants others that also infringe on its copyrights to stop doing so and will pursue them through legal channels.
MP3.com had settled other copyright infringement cases with the four other major music labels -- Warner Brothers Music Group, EMI Group, BMG Entertainment and Sony Music Entertainment. MP3.com paid $US20 million to settle each case, according to analysts and observers.
MP3.com spokesman Greg Wilfahrt could not be reached for comment. The Recording Industry Association of America Inc. (RIAA) filed each lawsuit on the behalf of the music labels. But each label had to come to a separate licensing agreement with MP3.com.