• by Wendy Davis , Staff Writer @wendyndavis, May 9, 2008

Facing pushback from three of the four major record labels, music search engine Project Playlist has hired former RIAA CEO Jay Berman as a consultant, CNET's News.com reports.

The major labels, with the exception of Sony BMG, recently sued Project Playlist for copyright infringement, arguing that the company enables piracy by making it easy for users to find and play copyrighted tracks.

As with lawsuits against other search engines, the legal issues are murky. Search engines generally are immune from liability under the DMCA as long as they don't know material they display is infringing. But there's little precedent in this area. One of the best-known cases so far, a lawsuit by adult publisher Perfect 10 against Google, ended with a partial win for each side. The court dismissed most counts against Google, but ordered a hearing to determine if Google knew its image search engine was returning infringing images and, if so, if it had any good way of preventing that.

For the record labels, the Project Playlist lawsuit marks just another in a long line of cases. Since 2000, the RIAA and/or specific record labels put the original Napster out of business, sued MySpace and other social media sites, and have threatened around 26,000 non-commercial users with litigation -- and then gone ahead and sued many who refused to pay settlements of $3,000-$5,000.

Yet the labels are still losing the battle to keep their old business model alive. Revenues have fallen to around $10 billion last year, from almost $15 billion in 1999.

Project Playlist CEO and founder Jeremy Riney told News.com that he hopes to strike a licensing deal with the record labels. "There is no money in shutting down companies," Riney reportedly said. "There is money in licensing companies and licensing opportunities."

Riney is right about that. The way things have been going for the music industry, it really has very little to lose by working with a company like Project Playlist that already has both fans and advertisers.