Talking of overly paranoid record labels doing stupid things, more on the long running litigation being pursued against one Patricia Santangelo by the Recording Industry Association Of America.
As previously reported, the RIAA has been pursuing legal action against single mum Santangelo after detecting that copyrighted music files were being shared via the internet connection in her home. It is likely, however, that any file sharing that went on was done by one of Santangelo's children or, even more likely, one of their friends. Certainly Santangelo had a good case to prove she herself was not guilty of copyright infringement - so much so she decided to reject the industry association's settlement offer and mount a defence, even though at times she couldn't afford legal representation. With a single mom single-handedly taking on all of the major record companies the case quickly became something of a David & Goliath type story, which posed a number of PR challenges for the RIAA, who secured more bad media coverage for themselves and their members. Especially given that Santangelo had a good defence case, even if file sharing had, indeed, gone on on the computer in her house.
Presumably recognising the strength of her case, the RIAA has now asked for the case against Patricia Santangelo to be dismissed, indicating that they will pursue action against her two children instead. That said, they have requested the action be dismissed "without prejudice", leaving things open for future litigation to be launched against Patricia should they wish to further inflict PR pain against themselves at some point in the future. Which they probably will. Not that suing two teenagers who already have publicly documented evidence to suggest they themselves didn't share music on their family PC (the Kazaa identity in question is similar to the identity used by one of their friends elsewhere) will be an easy ride in PR terms either.
PR nightmares like these really should remind everyone that when a lawyer comes along with some neat trick to help you cling on to an outdated business model, it's probably a better idea to find a new business model.