Bertelsmann Seeking To Dismiss Suits Over Napster

Bertelsmann yesterday (July 17) filed a motion to dismiss three copyright-infringement lawsuits filed against it over its relationship with Napster, Billboard Bulletin reports. In the suits, Universal

Bertelsmann yesterday (July 17) filed a motion to dismiss three copyright-infringement lawsuits filed against it over its relationship with Napster, Billboard Bulletin reports. In the suits, Universal Music Group, EMI and a group of music publishers allege that Bertelsmann's $60 million loan to Napster in October 2000 contributed to the infringement of works over the file-sharing network.

In its motion, filed in U.S. District Court in New York, Bertelsmann claims that U.S. copyright law "does not permit recovery from a third-party lender for damages the plaintiffs failed to recover from Napster."

Additionally, Bertelsmann says it did not profit from any illegal file sharing that occurred, and that its loan was convertible into a controlling equity stake "only if and when" Napster created a "fully licensed file-sharing service."

In a statement, Bertelsmann says its actions with Napster "were aimed at benefiting the entire music industry," as the loan was "specifically earmarked" for a service "in which all the major record labels and music publishers were invited to participate."

Napster was shut down by a court order in 2001.

In a statement, EMI says, "By investing both millions of dollars and management resources in Napster -- which was an illegal enterprise built on the unlawful distribution of copyrighted works -- Bertelsmann enabled and encouraged the wholesale theft of copyrighted music."

UMG says, "Bertelsmann did not merely provide a loan to Napster; nor was it merely a passive investor in Napster. Bertelsmann took control of the Napster system and directly and materially contributed to the infringing activities of the Napster users."
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