XM Makes Strides With Music Industry

The company settles a legal battle with recording heavyweight Universal Music.
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XM (XMSR) struck a deal with one of its legal foes -- Vivendi's United Music Group -- over recording music on satellite radios.

The deal centers on XM's Pioneer Inno, a hybrid radio and MP3 player that the satellite-radio concern hoped would rival

Apple's

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iPod. The Inno allows users to listen to radio broadcasts and record artists and selected songs.

The device was the subject of a lawsuit brought last year by the Recording Industry Association of America, a trade group representing Universal Music,

Warner Music

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,

EMI

and

Sony

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.

Universal agreed to withdraw as a party to the lawsuit, but neither XM nor Universal disclosed the terms of the deal.

"We are pleased to have resolved this situation in an amicable manner," United Music CEO Doug Morris said in a press release.

XM still needs to reach settlements with the rest of the group or face a trial. XM chief Nate David said in the press release that the company looked "forward to continuing our discussions with our other partners in the music industry."

The music labels argued that recording songs and compiling playlists went beyond the broadcast licensing agreement. XM claimed that the service is protected by the Audio Home Recording Act of 1992, which allows users to legally record material of their choice.

In January, U.S. District Judge Deborah Batts handed XM a legal defeat when she denied a request to throw out the copyright lawsuit brought by the music industry.

Proposed merger partner

Sirius

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settled a similar case with the music companies early last year after it introduced its S50 radio with MP3 recording and playback features.

XM shares were down 43 cents to $13.12 and Sirius fell 9 cents to $3.22 Monday.