Today a U.S. District Court judge ruled the major labels' lawsuit against XM Satellite Radio can proceed (read AP article).

Background: Atlantic Recording, BMG Music, Capitol Records and other music companies sued XM for allowing songs to be recorded and store on portable XM receivers. The labels argue they have licensed their content only for broadcast, and that the creation of a digital copy makes XM a distributor as well as a broadcaster.

The judge on the the justification for the lawsuit:

"The record companies sufficiently allege that serving as a music distributor to XM + MP3 users gives XM added commercial benefit as a satellite radio broadcaster."

The judge on XM's claim it is protected by the Audio Home Recording Act of 1992, which allows individuals to record music played on broadcast radio:

""It is manifestly apparent that the use of a radio-cassette player to record songs played over free radio does not threaten the market for copyrighted works as does the use of a recorder which stores songs from private radio broadcasts on a subscription fee basis."

Additional reading:

• The EFF's analysis of the lawsuit
• Washington Post: "A Music Player Only the RIAA Can't Love." A look at the Inno, the device at the heart of the lawsuit.
• BusinessWeek.com: "Copyrights And Wrongs." I disagree with the main thrust of the article. This lawsuit isn't "part of the futile effort by entertainment companies to control how customers use their products." Different uses of content require different licenses. Broadcasting and distributing are different activities with different values to the end user.