LABELS TAKE AIM ON AIMSTER

Topping off what must have been a bitch of a week for Aimster, a suit on behalf of all the major record companies, except AOLTW, was filed in New York today. The good news is that AOLTW is staying out of the fray. Oh, wait. AOLTW is expected to file a separate lawsuit.

Aimster, in case you missed our stories this week, lost an arbitration panel decision to AOLTW, meaning that they have to transfer Aimster.com and similar domain names to AOLTW. The panel said that the names were intentionally chosen for their similarity to AIM. Aimster has appealed the decision and claims that the name Aimster comes from the middle name of developer Johnny Deep’s daughter, Aimee, the current poster girl for the service.

Aimster’s main product allows users to exchange files, including pictures, software and movies, through AOL’s Instant Messenger programs.

AOLTW decided to file on its own because Aimster is seen as a threat to its film division as well.

In response to a cease-and-desist letter from the RIAA earlier this month, Aimster filed suit in the same New York court asking for declaratory judgment that it is not infringing on copyrights. The company has hired Napter attorney David Boies’ firm, Boies, Schiller and Flexner to plead its case.

The RIAA’s Matt Oppenheim told Reuters that the group has tried to meet with Aimster to resolve the matter, but the Aimster people have cancelled several times.

Not to be satisfied with just one pending court case, the RIAA also dropped the legal hammer on Launch. The suit alleges that the company’s licenses with Universal, Sony, BMG and EMI do not allow for the level of interactivity and customization offered by the company’s LaunchCast service, which allows users to decide how often they want to hear particular songs.

In response to the suit, Launch removed LaunchCast from its site on Thursday.

"We strongly believe that LaunchCast complies with the [Digital Millennium Copyright Act], and we plan to continue talks with the RIAA to ensure a positive outcome for both music lovers and the music industry," Launch CEO and co-founder David Goldberg said in a statement. "Certain features of LaunchCast may be temporarily suspended until we have come to an agreement with the parties in regard to its operation."

The timing of the suit couldn’t have been worse, as Launch was in the process of trying to close a $5 million loan on Thursday, to give the company the capital to carry it to the end of the third quarter. At that point, Launch expects to make enough money to cover its operating expenses.

Goldberg added, "We’re hopeful we’ll be able to work this out very quickly without litigation."

In early trading on Friday (5/25), Launch had dropped 5 cents to 28 cents a share, considerably below the company’s 52-week high of $9.75.