It seems like the lines between legal and illegal recording of digital music content are starting to blur. Even if you head into a perfectly legitimate Best Buy and grab the hot new Pionner Inno. It seems like the songs that you store on the device have not been a-okayed, a number of record labels have banded together to sue XM Radio over the device.

They’re saying that although XM already pays a licensing fee to be able to broadcast the songs in the place, they never paid the necessary fees to allow customers to record the music. They don’t hold the same rights as say iTunes, Napster, Rhapsody and other digital content providers, because these guys actually pay a hefty fee to be able to provide “recordable” content.

The lawsuit is pretty hefty too, as they are demanding $150,000 in damages per song recorded by XM customers, and given that XM plays 160,000 different songs each month, this could be quite the significant hit to the growing company.