The Recording Industry Association of America filed a lawsuit yesterday alleging that XM Satellite Radio's recently launched "Inno" handheld receiver - which stores up to 50 hours of downloaded music - is in violation of federal copyright laws because it allows users to save and label songs, writes Radio Ink (via MediaBuyerPlanner). The lawsuit demands XM pay $150,000 in damages for each song copied by its customers using the receivers; the company has said that it plays nearly 160,000 different songs each month.

XM argues that the device is similar to a videocassette recorder, and notes that songs stored on the receiver from its broadcasts cannot be copied and last only as long as a customer subscribes to XM's service.

In a statement, XM said, "These are legal devices that allow consumers to listen to and record radio just as the law has allowed for decades. The music labels are trying to stifle innovation, limit consumer choice and roll back consumers' rights to record content for their personal use."

The Senate Judiciary Committee is currently reviewing legislation that could support the RIAA's argument.