"...Computer giant Hewlett-Packard has become the first company to be snagged by a German law requiring firms to pay fees for making CD burners that are being used to illegally lift the latest hits off the World Wide Web. Many of Germany's neighbors, including France, Italy and Greece, have similar laws meant to protect authors and musicians by nailing makers of equipment used to violate copyright laws. But the laws date back decades and focus on devices like tape recorders and video players.

The German case against Hewlett-Packard extends Germany's pre-existing law into the digital age, when such things as CD burners, computer printers, hard drives and high-speed modems make it easier to copy and transfer copyrighted items.

GEMA, German's main licensing group, targeted Hewlett-Packard as a test case in May, reasoning that the company leads the German market leader in CD burners. But Hewlett-Packard dug in its heels when it was ordered to pay 30 marks ($12.90) for each CD burner sold in Germany since February 1998.

The legal battle continued until Thursday, when an agreement was reached to have Hewlett-Packard pay 3.60 marks ($1.54) for each unit sold during that period while agreeing to pay 12 marks ($5.16) for each one sold in the future.

Other companies selling CD burners in Germany will also be subject to the fees, which could vary depending on what kind of agreement they reach with GEMA. The Hewlett-Packard settlement is expected to set a benchmark, however..." NULL