Seagram Chief Gives Brief Testimony in MP3.com Trial

NEW YORK —  Seagram Chief Executive Edgar Bronfman Jr. testified Wednesday that he believes MP3.com purposely violated the copyrights of record companies to build an online catalog of 80,000 CDs.

Bronfman’s testimony in a civil trial in federal court in Manhattan was brief because Judge Jed Rakoff decided that the executive’s opinions were not relevant to deciding whether MP3.com intentionally infringed on copyrights.

Before the reluctant witness finished his testimony, he said he doubted MP3.com “accidentally bought 80,000 CDs” to load into a service that allows customers to access favorite music from anywhere once they prove they own the CD.

“Yes, I do believe it was a willful disregard of the law,” he said.

Universal Music Group and Interscope Records, the music arms of Seagram, are the last plaintiffs in a lawsuit brought by the recording industry against the fledgling San Diego-based Internet music company.

In the most recent fiscal quarter, MP3.com set aside $150 million for legal costs, including the price of settlements with four other major music makers--Warner Music Group, BMG, EMI and Sony Music Entertainment.

MP3.com had hoped to settle with Seagram before the trial but believed it was unable to do so because Seagram wanted to compete in the Internet music space itself, the judge said as he stopped the questioning of Bronfman.

The judge told courtroom spectators that lawyers for MP3.com had revealed earlier that they were questioning Bronfman to expose Seagram’s “competitive motives for pursuing this lawsuit.”

“It seems to the court that that is completely irrelevant to any issue before the court,” he said. “No one is obliged to settle a lawsuit.”

Rakoff said it was common that money and competitive motives are at the root of lawsuits.

He said Bronfman’s testimony would be irrelevant to whether he decides MP3.com purposely violated the copyrights or whether stiff penalties must be imposed to warn others against violating copyrights.

If the judge rules against the company, MP3.com could face penalties of up to $150,000 for each of an estimated 5,000 Seagram CDs it put in its online music collection. Such a penalty could approach three quarters of a billion dollars.