A group of music publishers filed a lawsuit against XM Satellite Radio late last week that alleges the company has refused to stop widespread infringement of top copyrighted material. In the complaint filed in a New York federal court, the National Music Publishers Association (NMPA) charged that the satcaster’s XM+MP3 service dodges copyright laws by allowing subscribers to make permanent copies of satellite-delivered tracks with various handheld devices without the permission of and compensation to rights holders.

Said Debra Wong Yang, the group’s attorney, the service “constitutes pervasive and willful copyright infringement to the overwhelming detriment of copyright holders, legitimate online music services and, ultimately, consumers.”

Despite the 1992 Home Recording Act allowing listeners to record music off the radio for personal use, NMPA brought the suit claiming the devices XM is promoting more resemble audio downloading services like Apple’s iTunes and not traditional recording units. The iTunes service falls under separate copyright licensing regulations, and NMPA said XM’s model is robbing musicians of proper royalties.

NMPA President David Israelite said the group’s legal posturing is a last resort attempt that followed lengthy discussions between the parties over compensation rates. XM officials tagged the lawsuit as a negotiating ploy to gain an unfair advantage in the ongoing discussions for royalty payments.

According to court documents, the music group is seeking an injunction to stop the practice in question with a maximum of $150,000 in damages for each alleged infringement. The lawsuit could end up being one more hurdle in the company’s plans to pull off its $13 billion merger with rival satellite radio provider Sirius.