US online music service Bluebeat will pay British recording label EMI nearly a million dollars to avoid trial in a case over rights to stream and sell versions of Beatles songs.
Along with paying $950,000, Bluebeat agreed to "permanently cease and desist" from infringing on copyrighted music belonging to EMI and other plaintiffs, according to a copy of the settlement.
EMI filed the suit in November 2009 in Los Angeles and trial was to begin Tuesday.
While granting a restraining order early in the proceedings, US District Court Judge John Walter indicated that he was shown no evidence supporting Bluebeat's claim that it wasn't infringing on EMI's rights to Beatles songs.
Bluebeat co-founder and chief executive Hank Risan had defended Bluebeat and sister website Basebeat.com, contending that they were legally selling "psycho-acoustic" simulated performances and not re-recorded Beatles tunes.
EMI countered that Bluebeat, which streamed music free and offered MP3 downloads of songs for 25 cents each, was distributing Beatles music without authorization.
Bluebeat had reportedly distributed 67,000 Beatles songs before the court intervened.
EMI owns the rights to Beatles recordings and collaborates with Apple Corps on distribution of the music.
Apple last year won the right to sell Beatles songs at its iTunes online ship, where tunes are priced at $1.29 each.
US District Judge Josephine Staton Tucker on March 25 endorsed the settlement, which leaves open the option of EMI going after Bluebeat for legal costs incurred by the case.
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