Independent rights group Merlin has settled its copyright-infringement lawsuit against Sirius Satellite Radio for $1.6 million. The class action lawsuit stemmed from Stiletto, a hand-held receiver that allowed Sirius subscribers to record audio broadcast on its channels.

The lawsuit applies only to Sirius before its 2008 merger with XM Satellite Radio. Merlin settled with XM last year over its portable device, the Pioneer Inno, which also allowed subscribers to store songs from satellite radio broadcasts. The major labels settled their lawsuits related to the Inno and the Stiletto in 2007 and 2008.

The settlement closes a chapter in the music business's ongoing struggle to embrace innovations without sacrificing rights. The portable, hand-held Stiletto - it looked much like the MP3 players of the day - debuted in 2006. It played music broadcast by the satellite network and could also stream Sirius's online music over WiFi. Record labels argued the device gave Sirius the ability to act like an on-demand subscription service while paying only performance royalties.

The $1.6 million settlement is open to Merlin members and other independent record labels. A Merlin spokesperson says the payments will be made by a class administrator in accordance with a court-approved plan of allocation. The exact timing and process of the payments will be determined by the class administrator.

Merlin CEO Charles Caldas said he believes the organization's ability to successfully litigate takes on added importance when the record industry is facing increased consolidation. "Actions such as this further underline the enormous value that Merlin provides to the ever growing list of independents that have chosen to enhance their business by joining our organization," he said in a statement.

Launched in 2008, Merlin represents independent record labels such as Beggars Group, Koch/E1, Tommy Boy, Epitaph, Yep Roc/Redeye, !K7 and Warp. The organization has licensed its members' catalog to the likes of Spotify, YouTube, Google Music, Rdio and Simfy, and has reached copyright infringement settlements with LimeWire and Grooveshark in addition to the two satellite radio companies.