• United States
by Ann Harrison

Bertelsmann lashes out against P2P lawsuits

Jul 31, 20032 mins
Enterprise Applications

* Bertelsmann asks judge to throw out copyright infringement lawsuits

Bertelsmann, which has tried to revivify the Napster name for its own online music scheme, is turning its legal guns against other music studios foolish enough to sue the giant German media conglomerate for investing in the now defunct file swapping service. 

Bertelsmann has asked the U.S. District Court for the Southern District of New York to dismiss three copyright infringement lawsuits associated with its investment in Napster. The lawsuits were issued in February by EMI Group, Universal Music Group Recordings and another unnamed plaintiff. They charged the German media giant and its U.S. operations with “vicarious and contributory” copyright infringement through its involvement in Napster, Bertelsmann said in a statement.

The motion to dismiss the claims was submitted by both Bertelsmann AG, in Gütersloh, Germany, and its U.S. subsidiaries Bertelsmann Inc., and BeMusic.

Bertelsmann and Napster entered into a strategic partnership in 2000 in which the German company poured millions into the original file trading site. According to claims by the music companies, without the Bertelsmann funding, Napster would have been closed in 2000 and not 2001 when a California federal court ordered its closure.

The claims by the music companies are extraordinary considering that no court has ever found that simply investing in a file trading service could expose an investor to copyright infringement liability. In a statement, Bertelsmann called the claims a “groundless and discredited” presumption, arguing that it would upset capital markets by potentially expanding the reach of copyright laws to companies that had nothing to do with infringement.

Bertelsmann is right. It’s gratifying to see the company throw its extensive resources against this effort by other music companies to choke off funding to companies associated with file trading. The plaintiffs are seeking damages of $17 billion in their lawsuits. They have four weeks to respond to the Bertelsmann motion and Bertelsmann gets four weeks. Then it’s up to the judge. Lets hope the judge exercises some clear thinking in this dispute and tells the plaintiffs to take a hike.