MP3.com flies on BMI pact

Shares of legally troubled online music company MP3.com (Nasdaq: MPPP) revved up 36 percent Monday after announcing a licensing agreement with BMI.

The company's shares have been suffering since a federal judge ruled April 28 that MP3.com violated copyright law by allowing its users to store music and then access it via any computer connected to the Internet. The ruling stemmed from a lawsuit filed in January by the world's largest record labels, which said MP3.com's database of more than 80,000 albums infringed their copyrights. MP3.com is trying to negotiate with the record companies to settle their case out of court.

Shares were up 3 3/4 to 14 1/8 Monday. The company topped first quarter expectations with a smaller-than-expected loss.

The licensing agreement with the American performing rights organization, Broadcast Music Incorporated, or BMI will allow MP3.com to use the BMI repertoire of more than 4.5 million songs within the MP3.com site.

The company's competitors include CDNow (Nasdaq: CDNW), Emusic.com (Nasdaq: EMUS) and Universal Music Group according to Hoover's Online.