Recording industry launches new suit against Morpheus

The Recording Industry Association of America (RIAA) has filed a new lawsuit against StreamCast Networks, owner of the Morpheus file-sharing software, over an Internet radio service the company never got off the ground. The move comes barely six weeks after a Los Angeles federal judge ruled in another case brought by the recording industry that the company was not responsible for illegal file-trading done using its software.

The RIAA is now claiming that Los Angeles-based StreamCast violated copyright laws when in 1999 the company bought about two thousand CDs to start up an Internet radio station that was never launched, according to Michael Weiss, chief executive officer of StreamCast.

The RIAA is a trade organization that represents the U.S. recording industry including Sony Music Entertainment Inc., Universal Music Group Inc., EMI Group PLC's EMI Recorded Music, AOL Time Warner Inc.'s Warner Brothers Records Inc. and Bertelsmann AG's BMG Entertainment Inc.

Weiss accused the RIAA of trying to stifle innovation, and said it is "grasping at straws" trying to stop StreamCast.

MusicCity.com Inc., as StreamCast was known in 1999, had every intention of complying with the 1998 Digital Millennium Copyright Act (DMCA), Weiss said. The DMCA offered provisions for Internet broadcasters to license radio stations for a then-undetermined fee, without having to get licenses from the individual record companies, he said.

However, the DMCA put restrictions on the frequency of play of artists and if a company wanted to exceed those limits they had to negotiate separately with the record companies. For example, under the DMCA a maximum of four songs by one artist could be played in an hour, Weiss said.

Weiss said MusicCity attempted negotiations with record labels but was not satisfied with the terms. That, along with other business issues, caused the company to abandon the project altogether.

The music remains stored in a large database which was turned over to the plaintiffs during the California lawsuit, Weiss said.

The RIAA is remaining tight-lipped about the current lawsuit and would not comment on the specifics of this case or on the appeal against April's ruling in California.

"This is another step in our ongoing litigation against StreamCast, a company that we believe is responsible for widespread copyright infringement," the RIAA said in a statement on Wednesday.

A lawyer from the Electronic Frontier Foundation (EFF), the digital civil liberties organization which represented StreamCast in the California case, said the RIAA is bent on driving the company out of business.

"It seems clear that they are shopping for a more favorable judge than the one that just ruled against them in the main case. It is a pretty unvarnished attempt to just drive this company out of business. If you can't win by the law, you win by miring your opponent in legal fees," said Cindy Cohn legal director at EFF, based in San Francisco.

The current suit was filed in Tennessee with information from the California case, according to Cohn. That may not be allowed because of a protective order issued in that case, she said.

"They might be violating the confidentiality order issued in the California case," she said. EFF has not decided if it will offer its services to StreamCast for the Tennessee case, Cohn said.

Regardless, Weiss is confident that StreamCast will again emerge victorious.

"Morpheus has been ruled as a legal piece of software," he explained. "The company has been vindicated; the lawsuit that was filed against us was about technology and not about piracy, and no single entity should be able to control technological innovation or stifle it. We do believe we're going to prevail."

(Joris Evers, in San Francisco, contributed to this report.)

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