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Settlement of the StarDigio Case
  The civil lawsuit, appealed by 13 of RIAJ's member record companies against DAIICHIKOSYO, for cessation of the StarDigio broadcasting service by reason of infringement of the right of reproduction, was settled before the Tokyo High Court on 26 December, 2002.
The outline of the settlement is as follows.
   
 
1. Appellants
  Columbia Music Entertainment, Inc.
Victor Entertainment, Inc.
King Record Co., Ltd.
Teichiku Entertainment, Inc.
Universal Music K.K.
Toshiba-EMI Limited
Sony Music Entertainment (Japan) Inc.
Pony Canyon Inc.
Warner Entertainment Japan Inc., Warner Music Japan
BMG Funhouse, Inc.
Pioneer LDC Inc.
Avex Inc.
FOR LIFE MUSIC ENTERTAINMENT, INC.
RIAJ (intervenient participant in the lawsuit)
   
 
2. Appellee
  DAIICHIKOSYO CO., LTD
   
 
3. Outline of the Agreement
  DAIICHIKOSYO shall respect the right of producers of phonograms as neighboring right holders and comply with the following rules for exploitation of commercial phonograms in the "StarDigio (100 channels digital music radio broadcasting)" programs on the "Sky PerfecTV":
 
(1) It shall not indicate the starting/ending time of each music track in an advanced announcement of detailed programs of "StarDigio" via fax, Internet web site, and/or other means.
(2) It shall not use newly released commercial phonograms for the following period:
  Singles: 4 days from the following day of the release date
Albums: 10 days from the following day of the release date
(3) All music of an album shall be, in principle, divided and broadcasted during 3 or 2 weeks after the period of the (2) above, depending on the period after its release.
   
 
4. History through the Settlement
 

  This lawsuit was the case that in July and August, 1998 plaintiffs (each record company) filed against DAIICHIKOSYO for the cessation of the broadcasting and payment for damages, claiming that the exploitation of commercial phonograms in the "StarDigio (100 channels digital music radio broadcasting)" programs (formerly called "DAIICHIKOSYO StarDigio 100") on the "Sky PerfecTV" operated by the appellee infringes the right of reproduction.
  After the dismissal of the case was made by the Tokyo District Court in May, 2000, the case had been pending at the Tokyo High Court. Receiving the recommendation of the settlement from the court, both parties have reached an amicable settlement after the negotiations between the parties.
  The settlement reflects the respect for the right of producers of phonograms and is considered to cure substantial imbalance between the producers and music broadcasters to a certain extent.

  With this settlement RIAJ and our member companies will endeavor to further develop music industry and to establish an effectiveness of the producers' right on music broadcasting.

   
 
<Note> The number and names of the appellants have been changed from the initial filing due to the restructuring of record companies in Japan.
   
  26 DECEMBER, 2002
 
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