Universal, EMI Sue Napster's Backers
Universal Music Group (UMG) and EMI filed a lawsuit against the venture capitalists who backed Napster Inc., claiming they contributed to the copyright violations by millions of the defunct song-swappUniversal Music Group (UMG) and EMI filed a lawsuit against the venture capitalists who backed Napster Inc., claiming they contributed to the copyright violations by millions of the defunct song-swapping service's users. The two record labels filed the lawsuit Monday in California federal court against Hummer Winblad Venture Partners and two of the San Francisco firm's general partners, Hank Barry and John Hummer.
The suit seeks punitive damages, along with $150,000 per violation. It also is intended to dissuade investment in any of the song-swapping services that have risen in Napster's place. Napster filed for bankruptcy protection in June. At its height, the service boasted 60 million users.
"Businesses, as well as those individuals or entities who control them, premised on massive copyright infringement of works created by artists should face the legal consequences for their actions," the record labels said in a statement.
The suit alleges that the venture capitalists knew Napster was providing infringement to its users and the firm controlled Napster's activities through its $13 million investment in May 2000. Barry served as Napster's chief executive for more than a year and both he and Hummer sat on Napster's board.
Barry and Hummer anticipated that they might be sued and tried to negotiate protection from legal consequences when BMG Entertainment parent Bertelsmann was planning to buy Napster early last year. Those talks foundered, and Bertelsmann itself has been sued for its investment in Napster.
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