MP3.com Sued by Westport Insurance Corp.

March 8, 2001

San Diego, Calif.-based MP3.com was sued sued its insurer, Westport Insurance Corp., in U.S. District Court in Manhattan.

In its lawsuit, Westport seeks judicial declaration that it is not liable for costs incurred by MP3.com through the online music company’s copyright-infringement claims. According to the Associated Press, MP3.com’s request for a payment of $5 million for some of the millions of dollars of losses that have resulted from its copyright violations was refused by Westport.

It has been estimated that MP3.com has already paid $133 million to settle disputes with several large record labels. The insurer stated that coverage had been denied due to MP3.com’s alleged misrepresentation of business practices; engagement in willful violations of the U.S. Copyright Act; and entering into settlements without the insurer’s prior consent.

On the same day that Westport filed its lawsuit, a U.S. District Judge in New York ruled that MP3.com, which allowed online consumers to have access to unlicensed music, had willfully violated the copyrights of TVT Records and that the record label could seek damages from MP3.com.

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