Hey, That’s My $17 Billion

Songwriters file class action suit against Bertelsmann for supporting Napster:

Two world-renowned songwriters and two independent music publishers sued Bertelsmann for $17 billion Wednesday, accusing the German media conglomerate of deliberately helping users of the wildly popular Napster song-swapping service violate millions of copyrights.

Opening a new front in the war on Internet file-sharing, the suit in New York federal court seeks class-action status for about 160,000 songwriters and their publishers and is based largely on evidence that emerged in Napster’s bankruptcy proceedings last year, including memos from Bertelsmann executives who concluded Napster was breaking the law.

Despite those reservations and the complaints of its own BMG record label, Bertelsmann invested about $90 million in Napster starting in October 2000 and exerted a large degree of control over its operations.

The lawsuit alleges that without those investments, Napster would have shut down many months before its actual demise in July 2001. If it had folded earlier, fewer songs would have been illegally copied by its users.

….The named plaintiffs in the suit are songwriters Jerry Leiber and Mike Stoller and music publishers Frank Music Corp. and Peer International Corp. Leiber and Stoller wrote such classics as “Jailhouse Rock,” “Hound Dog” and “Stand by Me.” Frank Music controls the copyright for songs such as “Unchained Melody,” while Peer licenses “Blue Moon of Kentucky” and “Walk Like an Egyptian.”

The songwriters “have been fighting against Napster for years,” said Randy Poe, president of Leiber & Stoller Music Publishing. “They were there at the onset of this specific struggle, and they want to follow it through to its conclusion.”

Napster pioneered the use of peer-to-peer technology, which allowed tens of millions of users to find each other and copy songs in the unrestricted MP3 format. At Napster’s peak, as many as 10,000 works were copied each second, most of them copyrighted.

The legal case against Bertelsmann is similar to previous lawsuits against Napster filed by songwriters, music publishers and the major record labels, including BMG. Those suits accused Napster of aiding copyright infringement because it helped users find music Napster knew was protected. [LA Times]

I wonder if this has anything to do with Roxio’s purchase of Napster’s assets. Roxio CEO Chris Gorog will doubtless be discussing this at the Digital Music Forum – on second thought, he probably won’t while the litigation is pending.