Napster Lawsuit Moves Forward
German media giant Bertelsmann says it is disappointed by a judge's ruling in a U.S. district court in San Francisco this week that will allow four copyright infringement lawsuits brought against the company and venture capital firm Hummer Winblad Partners, as former Napster investors, to proceed.
Judge Marilyn Hall Patel denied Bertelsmann's request for a dismissal of the multibillion dollar lawsuit filed early last year by a group that includes Vivendi Universal's Universal Music Group, EMI Group's Capitol Records, a number of music publishers and major song writers.
Patel's past rulings lead to Napster shutting down its free Internet song-swapping service based on peer-to-peer technology, but the current lawsuit contends that Bertelsmann "facilitated" Napster's illegal activity through investments it made in Napster in 2000 and 2001, making the company "directly responsible for the infringing activity perpetuated by Napstera??s online users."
Bertelsmann invested over $100 million in Napster, but never made Napster part of its company and was later forced to write off most of its investments in the service.
This week, Patel ruled that the plaintiffs would be allowed to conduct pretrial discovery, even though those allegations "may be wholly unfounded."
In a statement, Bertelsmann quotes its lawyer, Ulrich Koch as saying that it expects the case to be dismissed at the summary judgment stage, before the trial begins.
"The facts simply do not support the allegations of control on Bertelsmanna??s part which Judge Patela??s decision indicates would need to be demonstrated for the plaintiffs to prevail in these lawsuits," Koch says in the statement. Bertelsmann declines to comment further on the subject and Hummer Winblad Partners could not be reached for comment.
The lawsuit does not affect Napster in its current incarnation as Napster 2.0, a fee-based music subscription service provided by Napster, or its parent company Roxio , which acquired the song-swapping service's remaining assets in November 2002 after it declared bankruptcy.