German media firm sued over Napster investments

By Joseph Menn
Los Angeles Times

Two world-renowned songwriters and two independent music publishers sued Bertelsmann AG for $17 billion this week, accusing the German media conglomerate of deliberately helping users of the wildly popular Napster song-swapping service violate copyrights.

Opening a new front in the war on Internet file sharing, the suit in New York federal court seeks class-action status for some 160,000 songwriters and their publishers and is based largely on evidence that emerged in Napster's bankruptcy proceedings last year, including memos from Bertelsmann executives who concluded Napster was breaking the law.

Despite those reservations and the complaints of its own BMG record label, Bertelsmann invested about $90 million in Napster starting in October 2000 and exerted a large degree of control over its operations.

The lawsuit alleges that without those investments, Napster would have shut down many months before its actual demise in July 2001. If it had shut earlier, fewer songs would have been illegally copied by its users.

A Bertelsmann spokeswoman declined to comment on the filing, saying the firm doesn't discuss litigation.

The named plaintiffs in the suit are songwriters Jerry Leiber and Mike Stoller and music publishers Frank Music Corp. and Peer International Corp. Leiber and Stoller wrote "Jailhouse Rock," "Hound Dog" and "Stand by Me." Frank Music controls the copyright for songs including "Unchained Melody," while Peer licenses "Blue Moon of Kentucky" and "Walk Like an Egyptian."