Bertelsmann seeks to block Napster lawsuits

Bertelsmann AG has asked a New York court to dismiss three copyright infringement lawsuits associated with the German media group's investment in defunct song-swap pioneer Napster Inc.

Bertelsmann filed a motion with the U.S. District Court for the Southern District of New York against claims by EMI Group PLC, Universal Music Group Recordings Inc. (UMG) and another unnamed group, who have charged the German media giant and its U.S. operations with "vicarious and contributory" copyright infringement through their involvement in Napster, Bertelsmann said Thursday in a statement.

The motion to dismiss was jointly submitted by Bertelsmann, in Gütersloh, Germany, and its U.S. subsidiaries Bertelsmann Inc. and BeMusic Inc.

Napster, which created an Internet song-swapping service based on peer-to-peer (P-to-P) technology, entered into a strategic partnership in 2000 with Bertelsmann, which helped fund the Internet start-up.

The music companies have alleged that if it weren't for Bertelsmann's funding of Napster, the P-to-P service would have been shuttered in 2000 instead of in 2001, when it was ordered to shut down by a California federal court. The music companies, which filed their lawsuit in February, are seeking damages of $17 billion.

No court has ever held that by providing money to an accused infringer, a funder is exposed to copyright infringement liability, Bertelsmann said in its motion to dismiss the lawsuits. Such a "groundless and discredited" theory, the company argued, would upset capital markets by potentially expanding the reach of copyright laws to actors far removed from the actual infringers.

The plaintiffs have four weeks to respond to the Bertelsmann motion, after which the German media group has a further four weeks to respond, according to a Bertelsmann spokesman. "Then it is up to the judge to decide how to proceed," he said.

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