The RIAA sued Project Playlist Monday alleging "massive infringement." News.com's Greg Sandoval quotes the complaint:
"Project Playlist performs and reproduces plaintiffs' valuable works (and induces and enables others to do so) without any authorization whatsoever," the RIAA said in its complaint, "without paying any compensation whatsoever." "Defendant is well aware that the overwhelming majority of the sound recordings in its index are infringing," the RIAA continued. "The overwhelming majority of the third-party Web sites that host these recordings do so illegally."For Project Playlist's perspective, check out their copyright notice:
Our search engine is based upon our growing index of links to music files legally posted on the Internet for promotional or other legal purposes. Our music player allows performance of music files through streaming technology and “in-line linking” of series of hyperlinks. In that way, we make it easy for our users to create a playlist that points to a series of music files hosted on third party websites. We do not control those third party websites. We do not host music files. We do not allow uploading or downloading of music files to projectplaylist.com. We are not a “file sharing” site, peer to peer or otherwise; and we do not support or endorse illegal copying of music. Project Playlist, Inc. pays performance royalties to ASCAP, BMI and SESAC, the three performance rights organizations (“PSO”) based in the Untied States. These three PSOs have reciprocal agreements with PSOs throughout the world. The creators and publishers of the songs you hear through projectplaylist.com or our embedded music player, are being paid a royalty for their work if they are members of ASCAP, BMI or SESAC or any one of over 125 other PSOs that represent songwriters and music publishers around the world. The more a song is included on our users’ playlists, the more royalties the writer and publisher of that song are paid by Project Playlist, Inc.
I haven't found the complaint online so I can't really talk about the legal theories. It does seem that facilitating infringement would create liability, though.