Record industry sues XM Satellite over handheld device

The federal lawsuit, filed in New York by the largest labels, accuses XM Satellite of ``massive wholesale infringement'' because its $400 handheld ``Inno'' device can record hours of music and automatically parse recordings by song and artist. The device is sold under the slogan, ``Hear it, click it, save it.''

The lawsuit seeks $150,000 in damages for every song copied by XM Satellite customers using the devices, which went on sale weeks ago. The company said it plays 160,000 different songs every month.

XM Satellite has balked at the industry's efforts to collect expensive distribution licenses similar to those required for Internet downloading services, such as Apple Inc.'s iTunes. Its chief rival, Sirius Satellite Radio Inc., has already agreed to pay for such licenses to cover similar gadgets for its service.