Billion dollar Case against Napster backers gets green light!

GristyMcFisty used our news submit to tell us that the original backers of the Napster music service, Bertelsmann and Hummer Winblad will now face lawsuits after a judge cleared the way for the suits.  The lawsuit has been filed by Universal Records and Capitol records and claims that that both Bertelsmann and Hummer Winblad did much more than back the service.  Universal Records and Capitol records claim that the investors kept hands on control of the company so are now liable for copyright infringement.  The two companies are looking for around 17 Billion dollars in damages to cover their losses when Napster was in operation. Bertelsmann's lawyers say that will ask for the dismissal of the case against them.

The original Napster service allowed users to download music for free without paying loyalties to the various record companies, it went offline in 2001 due to various lawsuits filed against it but record companies still anguish over the income they lost during the services lifetime.

A judge has refused to dismiss a lawsuit against the original funders of music-swapping service Napster. A number of major record companies brought the lawsuit against Hummer Winblad and Bertelsmann AG who funded the internet site. The site allowed music fans to download songs without paying royalties. It went offline permanently in the summer of 2001, after a series of rulings, but record companies are still concerned about perceived lost income. US District Judge Marilyn Hall Patel made the decision to allow the lawsuit to continue on Wednesday. Universal Music Group and Capitol Records allege that Hummer and Bertelsmann did more than just financially back the service's inventor, Shawn Fanning. They claim the investors maintained hands-on control over the company and are liable for copyright infringement. Allowing the legal action to carry on, Judge Patel wrote "courts have long recognised that in certain circumstances, vicarious or contributory liability will be imposed". Bruce Rich, a lawyer for Bertelsmann, said the company was not deterred by Patel's ruling and would likely ask again for a dismissal. At its height, the Napster service allowed millions of users around the globe to browse each other's MP3 music collections stored on their computers and download them for free.

You can catch the full story over at the BBC and The Register. Record companies suing other record companies things must be getting desperate in the music industry if they need to sue each other.  I wonder who will be next to sue the backers, im sure every record company wants to boost profits the lawsuit way i guess. 

Source: BBC UK