Squeeze the Stone, Flog the Dead Horse

Universal Music Group sues Bertelsmann over Napster backing:

The world’s largest record label is suing Bertelsmann AG, saying the German media conglomerate’s investment in Napster enabled music piracy on a massive and unprecedented scale — and it should pay for the thievery.

Universal Music Group’s suit, filed Monday in U.S. District Court in New York, alleges that Bertelsmann not only rescued the “infamous” Napster service when it was near financial failure, but sanctioned unauthorized music downloads to further its business goals. Universal said Bertelsmann should be liable for “millions upon millions of infringements” by Napster’s users.

Universal is owned by French conglomerate Vivendi. Bertelsmann, which has its own music arm, is a family-owned company that once planned to create an Internet music delivery service built on a legitimate version of Napster.

….The lawsuit is the latest in a seemingly endless stream of litigation related to Napster, the wildly popular song-swapping service. Under court order, Napster shut down its music service in July 2001 and later entered bankruptcy.

Two prominent songwriters sued Bertelsmann for $17 billion in February, accusing the German media conglomerate of deliberately helping users of the wildly popular song-swapping service violate copyrights.

Universal and EMI Recorded Music last month joined in a suit against Winblad Venture Partners, and partners John Hummer and Hank Barry individually, alleging the firm contributed to widespread Internet music piracy through its financial support of Napster.

….One copyright attorney predicted the latest suit would have little chance of success, since Napster complied with a federal court order and suspended all unauthorized downloads in July 2001.

“Maybe they did contemplate keeping the illegal service open. But they didn’t,” said Mark Radcliffe, an attorney with the Palo Alto firm, Gray Cary Ware and Freidenrich. “When the preliminary injunction came down, they shut down the service. The point is they didn’t infringe. They shut it down.”

Radcliffe said the Universal suit might be intended to discourage investment in Napster’s file-swapping progeny — Morpheus, Grokster and Kazaa. A federal district court in Los Angeles last month ruled that two of the next-generation services, Morpheus and Grokster, could not be held liable for the infringing activities of the users. [Mercury News]

This is just more intimidation of those who would invest in other P2P services – surely Universal could make better use of its resources.