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MP3.com Inc. filed a malpractice suit of more than $175 million against Cooley Godward on Friday, claiming the Palo Alto, Calif.-based firm was responsible for its decision to launch an Internet music service that led to dozens of copyright infringement suits against the company. Filed in Los Angeles County Superior Court, the suit says MP3.com retained Cooley in October 1999 to secure an opinion on the legality of launching its My.MP3.com service. The service allowed consumers to listen to and download CD tracks off the Internet. MP3.com copied thousands of recordings onto its computer servers and claimed “fair use” of the CDs since only those who already owned a particular CD could access it through the service. MP3.com says Cooley failed to “meaningfully advise about liability in an infringement suit” and falsely represented to MP3.com that it had secured expert opinion testimony that there were strong and viable defenses to any copyright infringement claims. A federal judge in New York ruled in September 2000 that MP3.com had willfully infringed Universal Music Group’s copyrighted music. Dozens of other suits were filed against the company. The suit, MP3.com Inc. v. Cooley Godward, 266625, says MP3.com has paid out in excess of $175 million in settlements, judgments and legal fees. The San Diego-based company is seeking damages in that amount plus several hundred million dollars more based on loss of value and good will. “We view the underlying claims as at odds with our view of the underlying facts of our relationship, and therefore think the claims are frivolous,” said Mark Pitchford, Cooley Godward’s chief operating officer. John Keker of San Francisco’s Keker & Van Nest is representing Cooley in the case. “Cooley’s job was to protect and guide MP3 from running afoul of the law,” said MP3.com attorney Allan Browne of the Beverly Hills, Calif., firm Browne & Woods. “Sadly, MP3 was led into a legal minefield resulting in many hundreds of millions in damages.” Browne said he believes this is the largest legal malpractice case ever filed in California. His 14-attorney firm has a malpractice suit pending against New York-based Stroock & Stroock & Lavan in Los Angeles County Superior Court, similarly claiming that the firm provided improper advice that resulted in millions of dollars in liability. And several years ago the firm represented an individual in a malpractice suit against New York-based Skadden, Arps, Slate, Meagher & Flom, which settled out of court. Copyright attorney Ian Ballon, a partner in the Palo Alto, Calif., office of Los Angeles-based Manatt, Phelps & Phillips, said commentators should be careful not to jump to any conclusions since any advice Cooley rendered would have been confidential. But he said he would suspect any opinion given by Cooley would have had sufficient caveats that “it would be difficult to put a claim on.” As to MP3.com’s potential liability, Ballon said the company went to market with a business model “that many copyright lawyers felt could expose it to liability.” But, he added, “there were a number of leading authorities that said a fair-use argument could be made.”

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