Bertelsmann has filed a motion in the New York courts to dismiss three copyright-infringement lawsuits it has been landed with in relationship to its involvement with Napster. The suits in question come from fellow majors Universal and EMI, and a collection of music publishers, who all claim that when BMG made a $60 million loan to Napster in 2000 they bought liability for the download service's copyright violations. With Napster no more they are suing BMG for compensation they claim they are still owed.
But in their motion last week BMG claimed that: "US copyright law does not permit recovery from a third-party lender for damages the plaintiffs failed to recover from Napster." The motion added that Bertelsmann 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." Which, of course, they never did.
But EMI weren't impressed: "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."
Universal added: "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."