MP3.com Faces New Litigation Days After Settlement

Just days after music downloading service MP3.com settled one battle with the music establishment, another lawsuit is filed against it.

Music company Unity Entertainment is the leader in a class-action copyright infringement suit filed by the law firm of Engstrom, Lipscomb & Lack in U.S. District Court for the Central District of California in Los Angeles. MP3.com officials confirm the action.

This suit comes only two days after MP3.com ended its long-standing battle with the major record labels. On Tuesday, the company was ordered to pay $53.4 million to Universal Music Group to settle charges of copyright infringement. Earlier, a court had ruled in favor of Universal, saying MP3.com violated copyright law.

"On behalf of both consumers and artists, we are disappointed to receive this complaint, particularly in light of the strides we have made in securing licensing agreements from now all five of the major record labels," says Michael Robertson, MP3.com chair and chief executive officer, in a prepared statement. MP3.com "will respond to this filing appropriately," he adds.

Settling With Music Labels

MP3.com has slowly been cutting deals with the record companies that sued it. Under the settlement reached earlier this week, MP3.com will offer two services. One is free and uses ads to generate revenue, but with copy-protection and limits on the number of files per person. The other is a paid subscription service without ads. MP3.com is still working out details, Robertson says. (See "MP3.com Slowly Gets Legal" and "MP3.com Signs a Musical Truce.")

The judge's order in the case involving UMG ended litigation that began in January when New York-based UMG and four other record companies filed suit against MP3.com. They charged the site with illegally copying thousands of CDs and then offering them as free Internet downloads.

MP3.com hosts a large collection of digital music with more than 698,000 songs and audio files from more than 109,000 digital artists and record labels. (See also "Rockin' in the Free World: All About MP3s" and "MP3 and You: Know Your Rights.")