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Hewlett-Packard Must Pay German CD Burner Fees

Germans Order Hewlett-Packard to Pay Fees on CD Burners Sold in Country

FRANKFURT, Germany (AP) -- A German court has ordered computer giant Hewlett-Packard Corp. to pay fees on all compact disc burners sold in the country over the last three years, upholding a new law meant to take a bite out of music piracy.

The fee, adopted last year by Germany's powerful copyright society GEMA, is intended to compensate musicians whose latest hits are being illegally lifted off the Internet using the technology.

Under a ruling handed down last week by a state court in Stuttgart, Hewlett-Packard must now report how many CD burners it has sold in the past three years.

The court also ruled the company will have to pay fines for every device sold over that period and for devices sold in the future. The court has yet to rule on how high the fee will be.

Hewlett-Packard officials were unavailable for comment Thursday, but the company has said it will appeal.

Last year, Hewlett-Packard tried negotiating a fee structure with German authorities and had offered to pay $1.62 for each unit sold during that period while agreeing to pay $5.40 for each one sold in the future.

That offer was withdrawn after talks broke down.

The company attacked the recent ruling as antiquated and said regulators are unfairly targeting Hewlett-Packard as a test case.

Hewlett-Packard also argues that individual licensing and user fees are better safeguards against pirating than jacked-up prices for CD burners.

Other companies selling CD burners in Germany will also be subject to the fees, but the Hewlett-Packard settlement is expected to set a benchmark.

Many of Germany's neighbors, including France, Italy and Greece, have similar laws meant to protect authors and musicians by targeting makers of equipment used to violate copyright laws.




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