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To: Paul Kern who wrote (3421)	11/19/2000 11:15:38 AM
From: Tom Hua	Read Replies (1) \| Respond to of 19633

Paul, one thing is for sure, there'll be news on MPPP this week. Regards, Tom Friday November 17 4:16 PM ET Record Labels Fuming Over Universal-MP3.com Ruling By Derek Caney NEW YORK (Reuters) - MP3.com Inc. (NasdaqNM:MPPP - news) may not be out of legal trouble yet as four record companies are fuming that Seagram Co.'s (Toronto:VO.TO - news) Universal Music, the world's largest record label, received twice as much as they each did to resolve a lawsuit against the Internet music company. At least one, possibly two, of the four labels -- Time Warner Inc.'s (NYSE:TWX - news) Warner Bros. music group; Sony Music Entertainment (7930.T); BMG, the music unit of Bertelsmann AG; and EMI Group Plc (news - web sites) EMI.L) -- are considering legal action to try to force MP3.com to increase the settlement payments to what Universal received, record executives said. Legal papers could be filed as early as next week, said the executives, who didn't want to be identified. Executives from Warner, BMG, EMI, Sony and Universal declined to comment. If successful, the possible legal actions could set MP3.com back another $134 million, on top of the $163.4 million it is set to pay record labels and music publishers as part of the resolution. An MP3.com spokesman declined to comment on Friday, but Chief Executive Michael Robertson had said on Tuesday after the resolution with Universal was announced, ``We don't believe the Universal award will affect the settlements with the other four labels.'' The five labels jointly filed the suit in January, claiming that a database of more than 80,000 albums compiled by MP3.com broke copyright law. The database is part of a service called My.MP3.com, which allows users to store music digitally and later access it via any computer. Mp3.Com Sought Settlements A U.S. District Court found in favor of the labels in April, forcing MP3.com to seek settlements with them or risk potentially crippling court-imposed damages. The company shut down the service in May. MP3.com was able to coax settlements out of Warner, BMG, EMI and Sony, agreeing to pay an estimated $20 million in damages to each of the four labels. Universal was the holdout. After several months of tense negotiations and hearings, MP3.com agreed to pay the label $53.4 million as part of a judgement issued by the court. Settlement Or Judgment Record executives said the agreements with Warner, BMG, EMI and Sony include so-called ``most favored nation'' clauses, which stipulate that if any label gets a higher settlement payout, all of the others must get that same amount. But because Universal's payment is ostensibly the result of a court-imposed judgment and not a negotiated settlement, MP3.com could argue that the clause may not apply, sources said. But one record executive downplayed the distinction between a judgment and a settlement. ``It doesn't matter what you call it. This is a settlement,'' the executive said. ``They can call it a judgment, but a judgment in agreement is the same thing as a settlement. If it walks like a duck, talks like a duck, smells like a duck, it's a duck.'' In September, U.S. District Judge Jed Rakoff ordered MP3.com to pay Universal damages of $25,000 per infringement. MP3.com and Universal were to litigate in court this week the number of albums that were infringed. Sources estimated MP3.com's potential liability to Universal at more than $100 million. Rakoff adjourned the hearing twice, while Universal and MP3.com heatedly negotiated in a small conference room adjacent to the courtroom. When they emerged at about 2:15 p.m., Universal's attorney, Hadrian Katz, formally requested a ``judgment'' be entered in the amount of $53.4 million. With no objections from MP3.com, the judge issued the order. After the judged issued the order, Robertson told reporters that Universal agreed to license its catalog for use in the My.MP3.com service and bought warrants for MP3.com stock. Since the Universal resolution was announced on Tuesday, MP3.com shares have increased by 2-1/2 times. In Nasdaq trading on Friday, shares rose 59/64 to $9-27/64. They rose as high as $11 in intraday trading, their highest level since August. The stock reached a high of $105 on the day of the company's initial public offering in July 1999 and hit a record low of $2-1/2 a month ago.