A judge has ruled that MP3.com willfully infringed copyrighted works owned by Universal Music Group when it made those works available online, and has ordered the company to pay the label $25,000 per CD it infringed, according to a statement issued by MP3.com. The decision, announced on Wednesday afternoon (9/6), could result in damages totaling up to $250 million dollars.

In announcing his decision on Wednesday, U.S. District Judge Jed Rakoff said that many Internet companies such as MP3.com “may have a misconception that, because their technology is somewhat novel, they are somehow immune from the ordinary applications of laws of the United States, including copyright law,” according to an Associated Press report. The report further quoted Rakoff as saying that such companies “need to understand that the law's domain knows no such limits.”

MP3.com's lawyer, Michael Rhodes, reportedly told the judge on Tuesday (9/5) that a fine of more than $500 per CD would be a "death sentence" for the company, according to the AP report.

"While we respect the court, we disagree with the court's decision and we look forward to taking our case to the Court of Appeals," said MP3.com chairman and CEO Michael Robertson in his company’s statement.

Rakoff--in accordance with copyright law--could have awarded UMG as much as $150,000 per work that MP3.com had infringed. Last month, Rakoff ruled that MP3.com would have to pay damages to UMG on a per-CD basis rather than a per-song basis, a decision that likely meant the difference between damages potentially totaling billions versus millions of dollars.

Wednesday’s decision stems from a copyright infringement lawsuit filed by the Recording Industry Association of America (RIAA)--on behalf of the five major record labels--against MP3.com earlier this year. In April, Rakoff ruled in favor of the RIAA. Four of the labels have since reached settlements and struck licensing agreements with MP3.com. Only UMG has pursued damages.

The next phase in the proceedings is set for November, when the court will rule on how many of UMG’s CDs MP3.com infringed when it made music from thousands of discs available to its users--who had ostensibly already purchased the CDs-- via its My.MP3.com service. UMG’s lawyer has reportedly estimated that number to total as many as 10,000 CDs, while MP3.com’s lawyer has reportedly put the number at just under 5,000.

The trading of MP3.com stock--which was trading down 8% at 7 7/8 for the day--was halted after the judge's decision was handed down. When trading of the stock resumed after-hours, the price was at 5 1/2, a down another 30%.