XM Satellite Radio Holdings Inc. settled a copyright infringement lawsuit Dec. 17 with Universal Music Group.
Universal, a unit of Paris-based Vivendi, and other major record labels had sued XM over its Pioneer Inno portable music player, which enabled subscribers to record music on the device for playback later.
The suit claimed XM's licensing agreement did not give it the right to record, distribute, or reproduce copyrighted music.
Universal broke away from the other record labels and settled. All terms of the settlement were not disclosed but the multiyear deal covers recording capabilities in current and future devices, the companies said in a joint statement.
XM hopes to reach similar deals with the other record companies involved in the suit, it said in a statement.
Wash., D.C.-based XM said in a statement that the deal recognizes the company is competing in a market in which consumers have multiple options for music.
The record companies argued in the suit filed in New York in May 2006 that the Inno essentially amounted to XM acting like an online store, such as Apple's iTunes Store, that sells music downloads.
XM claimed to have done nothing wrong and planned to fight the suit. According to legal experts, XM was likely to argue its device was no different than a digital video recorder that enables people to record TV shows and movies for playback later.
The lawsuit asked for a permanent injunction to stop the service and asked for unspecified monetary damages.