Record Labels Sue Napster's VC 594
zemkai writes "From the "wtf?!?" department... Universal Music Group and EMI are suing Hummer Winblad Ventures for contributing to copyright infringement due to that firm's investment in Napster... I'd like to put something witty here, but I'm just speechless."
Let me check my logic... (Score:5, Funny)
Lemme verify my logic here...
1. Napster lets you share music while viewing banner ads. Napster gets sued for everything it has.
2. Napster VCs made money from banner ads. VCs get sued for everything they have.
3. I viewed banner ads that made money for VCs.
Holy crap, we're all next...
Re:Let me check my logic... (Score:5, Insightful)
haven't they already started prosecuting college students ?
Re:Let me check my logic... (Score:5, Informative)
Fortunately, there's a bit of a resistance starting. Some students have started a website dedicated to the case here [servemp3.com], and there's supposed to be a rally Sunday afternoon.
You'd better believe I'm going to show up.
Re:Let me check my logic... (Score:5, Insightful)
General logic... (Score:4, Interesting)
If they win, then the generic case if illegal music file sharing service has company X for funding then they can be sued will be viable.
The laws are "general" i.e. I doubt the laws that have (supposedly) been broken here mention the words "music sharing" at all.
The real danger is that everything that those laws apply to will be just as illegal.
Is anyone doubting that Microsoft (just an example) is breaking some competition laws (somewhere on the planet) ?
Well, if you buy Microsoft Stock, you are helping them to commit a crime ..
Are you ready to go to prison for that ?
Re:General logic... (Score:3, Interesting)
Re:Let me check my logic... (Score:3, Insightful)
Enron? (Score:4, Funny)
Re:Enron? (Score:3, Insightful)
They run the show, hire the executives, micromanage the show in many cases. Further, when they shopped for this investment they didn't go to the market and comparative shop based on market statistics, etc... they specifically chose to invest because of the business model, which did happen to involve illegally trading music, like it or not. And in any other case the liability would stop at the corporation, maybe it
150 TRILLION in damages? Guiness Record? (Score:4, Interesting)
By the time of its close, Napster had contributed to billions of separate acts of copyright infringement, according to Monday's complaint. The record labels are seeking punitive damages of no less than $150,000 per violation of copyright, among other awards.
Assuming 1 billion violations * 150k$ = 150e12 bucks? Am I doing the math right here? Is this a Guiness World Record here or what...
and I thought that woman suing McDonalds was funny...
Right, wrong, irrelevent. What is, is.
Re:150 TRILLION in damages? Guiness Record? (Score:5, Interesting)
Oh, that's right... they stole them from us. Damn.
Re:150 TRILLION in damages? Guiness Record? (Score:3, Interesting)
"Fair use" *is* a "right", because "copyright" is a *privelege*.
Re:150 TRILLION in damages? Guiness Record? (Score:4, Informative)
Oh? They've done a LOT of things. Let's see, they're buying legislation so that they can change the Fair Use rules. Look how successful they are at keeping things from entering the Public Domain. They've bought legislation that exempts them from common labor laws. Their contracts with the artists would be illegal in every other industry. They're buying legislation so that they can "actively go after the bad guys". What this really means is be allowed to infiltrate EVERYONE's computer, and "only" sabotage the distributers. Why do you think we fight over wire tapping laws with the police? And believe me, once they have access to your computer, they will steal all your information and make money off it anyway they can. They have and continue to fight all technology that competes against their ancient business practices. If the music industry was a horse ranch, Henry Ford would be in jail, and we'd all be riding horses. The music industry acts like it is their god-given right to profit. It is not. And I'm sick of them blaming me that they have sales slumps during a recession!!
Re:150 TRILLION in damages? Guiness Record? (Score:3, Funny)
Re:Let me check my logic... (Score:5, Funny)
Why are you speechless? (Score:2, Insightful)
It's like investing in a local street gang. You can be sued by their victims.
Quit with the mock shock every time something completely expected and sensible happens.
Re:Why are you speechless? (Score:5, Insightful)
Re:Why are you speechless? (Score:2, Informative)
I though that it was determined by the appeals court that Napster had a substantial non-infringing use so techincaly it wouldnt have been a tool for violating copyrights specificaly. They were just required to remove content copyright owners told them to.
Correction (Score:5, Insightful)
Unless of course you consider your car a tool for running people over, since that's but one of many options available to you...
Re:Correction (Score:3, Interesting)
Re:Why are you speechless? (Score:5, Insightful)
In the same way FTP clients are a tool for violating copyrights.
Re:Why are you speechless? (Score:5, Interesting)
Tim
Re:Why are you speechless? (Score:3)
Re:Why are you speechless? (Score:2, Funny)
Re:Why are you speechless? (Score:5, Insightful)
That's the key. The key to holding the VCs responsible is proving that they were aware that the activities Napster was promoting were illegal. Personally I'd argue that you'd have to be a complete fucking idiot not to have realized that, but I am not a lawyer.
That's not to say I particularly like the music companies, but I think they have a very good chance of winning this one (Again, my non-lawyerly opinion.)
Wrong (Score:5, Insightful)
Modern capitalism is based very strongly on the concept of limited liability which means precisely that investors are not responsible for liabilities incurred by the companies they invest in. The companies are, and the investors can lose their investment, but they are not criminally liable for the company's actions (unless they participate directly in those actions) and they are liable only for the amount of their investment.
It's like investing in a local street gang.
No, it's like investing in Exxon before the Exxon Valdez or in Union Carbide before Bhopal. You can lose your investment. To suggest that it go any further undermines every principle upon which our economy is founded.
You're correct..but.. (Score:3, Interesting)
Perhaps if investors could have been held liable we would not have seen Exxon Valdez or Bhopal.
Yes, this would slow the economy down quite a bit. Then again, I've never been one to agree with "economy uber-alles" anyway.
Re:You're correct..but.. (Score:2, Interesting)
"I'm sorry, sir, you can't write and sell software."
"Why not?"
"Because it could be used for terrorism. Come with me."
* * *
"I'm sorry, sir, you can't sell fast food."
"Why not?"
"Because it contributes to obesity. Come along."
* * *
"I'm sorry, sir, you can't sell pencils."
"Why not?"
"Because someone might get poked in the eye and we can't allow that. Come with us. We are the government. We're here to help."
* * *
Of course, they would
Re: (Score:3, Insightful)
No, not the end of the stock market (Score:3, Interesting)
Re:No, not the end of the stock market (Score:2, Insightful)
I would disagree that Napster was "designed to violate the law and specifically exploting the RIAA's IP" for two reasons. One, the RIAA has almost
Re:Wrong (Score:2)
From the article:
"In May 2000, Hummer Winblad invested about $13 million in Napster and took control of its business and legal liabilities, with [Hank] Barry [general partner of Hummer Winblad] assuming an interim CEO role."
I agree that the lawsuit seems wrong on several levels, but I think the record companies could argue that Hummer Winblad did participate directly in Napster's actions.
Re:Why are you speechless? (Score:3, Insightful)
What about whistling? (Score:2, Troll)
Now they can get you for just humming the songs.
Re:What about whistling? (Score:5, Informative)
I really wish I was kidding.
Departmental misfilings (Score:2, Funny)
Did you get the memo about the TPS reports?
Re:Departmental misfilings (Score:2, Funny)
spending money (Score:2)
---
The devil finds work for idle circuits to do.
Heh (Score:5, Insightful)
Re:Heh (Score:2)
Presumably they're both (or at least Universal) aware of what Apple are planning to announce next week. Be interesting to see if that is cited as part of this - perhaps as some kind of "this is how to do music online legitimately, Napster chose to do the exact opposite" example.
Staying in business by suing the world. (Score:2)
Re:Heh (Score:3, Insightful)
The goal isn't to make money selling music, the goal is to make money off people stealing music. Why else would they be so lax about modernizing their business model? Stubborness clinging to old ideas is probably part of it, but lawsuits can be big money.
And this is only half sarcasm.
Re:Heh (Score:2, Insightful)
This is really dirty politics (Score:5, Interesting)
Re:This is really dirty politics (Score:3, Insightful)
Now, if a company does something bad, basically people can sue the investor.
Doesn't work very well, does it.
Re:This is really dirty politics (Score:2)
Way to go record labels! (Score:2)
The only surprise here (Score:3, Funny)
"Who's Left?" (Score:2, Interesting)
Hungry Lawyers, or Dinosaurs Marking Turf? (Score:3, Insightful)
"And in the year 2030, Mooseball Music Corp lobbies congress to extend copyrights another 70 years..."
CEO accountability for corporate actions? (Score:4, Interesting)
Makes sense to me (Score:2)
Re:Makes sense to me (Score:3, Insightful)
That's not the point. The question is whether Napster, Smith and Wesson, and even the *investors* in these companies are responsible for what people do with their product.
If I have a company that sells sharp knives, and you stab somebody with it, I am not (or should not at least) be liable for your crime. Nevermind my investors.
ill help you out then (Score:2)
Go Kazaa. More files, more filetypes, and more spyware. its a trifecta!
Umm, ok... (Score:4, Insightful)
--Jeremy
Jeez...next thing you know... (Score:5, Insightful)
Asininity at its finest. But hey, the more they keep digging, the deeper they get.
Re:Jeez...next thing you know... (Score:2, Insightful)
Try to read the articles. I know the expected reaction is Music companies are GAY! Winbolows! I hate music! I only like one song why pay for the whole CD! blah blah blah.
Hummer Winblad are the people who are legally responsible for Napster. They're the ones to sue.
Re:Jeez...next thing you know... (Score:3, Interesting)
Well, as someone who has been across the table from both VC's and reporters on numerous occasions, as well as being a strong believer in Occam's Razor, I assumed, assume, and will continue to assume that the "legal liabilty" assumption by HW is just plain wrong. VC contracts tend to go the exact opposite direction, up to and including the "if you get sued, we get our money back first!" type of term. Sorry, barring
Shouldn't be surprising (Score:5, Interesting)
The **AA are at war. They are going to use every trick, every tool in the box to sew fear and uncertainty in all those who would act against their survival. The idea of course, is to put the fear of god into anybody who might finance a startup venture that would break their business model.
Re:Shouldn't be surprising (Score:3, Insightful)
Indeed. It is total war with their customers.
They are going to use every trick, every tool in the box to sew fear and uncertainty in all those who would act against their survival.
Then they might as well just shoot themselves in the head and get it over with, because it is they, themselves, that act against their own survival.
[/me nominates RIAA and MPAA for Darwin awards]
What would they have to prove... (Score:3, Interesting)
So, what does Universal have to prove? Isn't there some protection in place for VCs?
It not as if they were silent partners (Score:3, Insightful)
From the article:
In May 2000, Hummer Winblad invested about $13 million in Napster and took control of its business and legal liabilities, with Barry assuming an interim CEO role.
IANAL, but it sure as hell sounds like whatever Napster was legally responsible for will apply to Hummer Winblad (what a silly, cool name). They were hardly silent partners.
Heh good luck (Score:3, Insightful)
Sounds like grasping for straws to me, basically the dying gasps of an industry that knows it's fucked. Napster was just the messenger, and these idiots are going to try to squash everyone who helped the messenger. That's like suing the people who ran the colo where Napster hosted their servers - after all, they entered into a business deal that let Napster perpetrate their infringement! Ridiculous. Ain't gonna go nowhere.
Of course, my favorite part is:
Hummer Winblad knowingly facilitated infringement of plaintiff's copyrights for its direct financial benefit.
For some reason, I don't really think they made much money from this investment.
Free money (Score:5, Interesting)
So, in order to make the case work, they'll claim that they'd have made some imaginary number of money more (96 billion dollars?) because millions of people downloaded MP3s, therefore didn't buy albums as a result of it. So even though that money didn't materialize, they'll magically make money on it by claiming damages as a result of Napster.
That's pretty messed up. I worked for a company that made a product and sold a whopping $5,000 worth of it. (Gross, not net even.) A larger company came along and claimed we infringed on a patent. We didn't, but how do you convince a jury that? They used lawyer math to claim this company did one million dollars in damages. Uh right. Their revenue was consistent with both their predictions and on previous experience, and the company I worked for only made 5k.
Like I said, free money. I wish I had a suggestion as to how this whole system could be fixed to prevent this type of fraud.
Re:Free money (Score:4, Insightful)
I have one such suggestion: fix it so that you can't claim a loss of any kind unless you also made the same loss claim to the IRS.
That'll force these morons to sue only when incurring real losses, not on the basis of this fantasyland crap.
Cut to the chase! (Score:5, Funny)
In an effort to fight rampant piracy, the RIAA announced that law enforcement officials will be arresting customers exiting music stores carrying product of any kind. "We've got to stem the flow of piracy at it's source" says Robbie Flack, the RIAA's cheif advisor to the Bush Administration. "These people are taking our intellectual property and playing it loud enough for other people to hear or showing it to their friends. Clearly this violates 'public performance' laws."
When asked whether this would discourage music sales, Flack responded that "those sheeple should just stay home and listen to appropriately licensed broadcasts of their favorite artists." RIAA officials stated that this is merely the first step in a long plan that they term the "War on Privac.... er Piracy" [ed note: this is how all RIAA staff pronounce it]. The next step according to the plan is to arrest executives from the very labels that the RIAA represents. "[the executives] are putting all of this copywritten material out there and giving consumers a sense that they own it. This is just wrong.", said Flack. The plan will culminate with the RIAA arresting themselves once Congress passes IMGOD-327, a controvercial new bill that would make RIAA staff federal law enforcement officers. The bill is expected become law in 2004 with very little resistance.
Re:Cut to the chase! (Score:3, Informative)
I wish I could remember where I read it at...
What part of "Limited Liability"... (Score:5, Interesting)
The defining characteristic of a corporation, in America, is that its investors cannot be held liable for more than the amount of their investment.
In other words, suing the VCs for the actions of the company they invested in is SPECIFICALLY PROHIBITED. What's next? Someone finds a syringe in a Coke bottle, and lawyers sue every little old lady who owns shares in a mutual fund that invests in Coca-Cola stock?
Re:What part of "Limited Liability"... (Score:5, Informative)
If you look at a publicly traded companies, you will virtually never be able to pierce the corporate veil down to the shareholders. The reason for this is that they stock is so widely distributed that the courts could not reasonably find that such a publicly traded company was the alter ego of any single or small group of investors.
The same cannot be said of small enterprises. It is not uncommon, when a company is getting started, for the CEO/President/staff to use his personal funds to prop up the company and then to take company funds for personal use. This is a no no. It is also common for the investors to get together and decide how to do things and not keep minutes. This too is a no no.
There are many means available to resolve these problems, or at least lessen them, today. The most common is the use of a Limited Liability Company. This lets you dispense, or at least lessen some of the corporate formalities in terms of board meetings. You would still be well advised to keep the bank accounts seperate. The biggest limitation of an LLC is generally the number of investors, depending on the state.
In short, there are a lot of people out there who could use just a little legal advice on how to keep their liabilities limited, but they are penny wise and pound foolish by not making a regular visit to the lawyer just like they do the doctor. Yes, IAAL, but I am not your lawyer. Go get one...blah, blah, blah.
-cliff
I'm having trouble understanding the concept... (Score:2, Insightful)
Now, my understanding is that the damages should offset 100% of the losses made by the RIAA, so that the books are balanced, and the side on the right side of the law doesn't make a loss.
If this has already happened, why are they now suing another party? Did they make a further loss because these people invested in the company? Aren't they claiming twice for the same injury?
finally.. the profit puzzle is solved (Score:2)
2. Sue there assess off
3. Profit!
Standard practice (Score:2, Interesting)
My Business Law teacher used to tell us, "You sue everyone for everything all the time". They are trying to scare anyone who is or is thinking of becoming associated with Napster type applications. It's a common tactic to stop what you can't compete against.
As for the $150,000 per violation, lawyers routinely ask for the sky knowing that it will be amended. I was on a jury recently for a DWI lawsuit and the plaintiff's lawyer was asking for several hundred thousand. During deliberation, everyone discus
I'm suing... (Score:2)
I wrote about this in 2000 ... (Score:5, Informative)
My article, from Upside.com:
Hummer Winblad could answer for Napster's sins [ryantate.com]
Legal experts say there is a good chance the flush venture capital firm Hummer Winblad stands to lose more than its $13 million investment in Napster Inc. if the music-swapping firm is fined for music piracy.
then the Economist did a story:
Hummer's Napster bummer: Napster's backers under attack [ryantate.com]
Limitations of liability (Score:2)
One of the major principles of corporate law, for the past hundred years, is that only the company itself (and in certain circumstances the company's directors) are liable for legal action. The shareholders are exempt, and their loss is limited to the amount of their original investment (i.e. the company files for bankruptcy and the value of their shares drops to zero.
The attempt to sue a major investor of Napster is equivalent to attempting to sue every mutual fund, investment bank, or major shareholder
Re:Limitations of liability (Score:3, Funny)
So, can we now all file lawsuits against every director, every major investor, VC firm, etc, associated with a RIAA label, for their contributon towards their illegal collusion in CD price fixing?
Proven now more than ONCE.
the sword cuts both ways (Score:5, Insightful)
How is this such a wrong thing anyway? Hummer Winblad knew that Napster operated by exploiting copyrights they did not own, but they gave them money anyway. Giving money to a terrorist group that will commit crimes is illegal; why shouldn't it be illegal to give money to a company that will commit crimes also? Ignore whether the law is just; as it stands right now, Napster was illegal.
Check out how much they want... (Score:2)
So at a minimum, this is two-billion times $150 thousand, or $300 trillion! And you thought asking $97 billion from college students was bad...
Piracy my ass... (Score:2, Insightful)
"Record companies and music publishers have much to be concerned about, according to recent research. Worldwide sales of music CDs, records and cassettes fell for the third year in a row, hit largely by rising Internet piracy in the United States, according to figures for 2002 by the International Federation of the Phonographic Industry. Last year saw the steepest fall yet, with a 7 percent drop in global music sales and a 10 percent fall in units sold in the United States."
Piracy? Piracy? This is total
duh, that's what labels do.... (Score:2)
And now the music labels seem to be running off of a similar philosophy. I can just imagine
Next step (Score:5, Insightful)
Maybe sound card manufacturers for having good quality line-in/mic jacks - they should have limited them to 22khz or something suitable for voice.
It probably won't go as far as suing the retailers for selling CDs to "pirates", however.
Investing in the future... (Score:2)
Trust me...the day I win Powerball [powerball.com] several [fsf.org] organizations [nmss.org] are [gentoo.org] going [debian.org] to [eff.org] receive [slashdot.org] anonymous [zophar.net] donations [kuro5hin.org].
Have they checked their prices or content lately? (Score:5, Insightful)
Eventually, a record company will realize that it would be better off releasing a higher quality product at a lower price, its sales will go through the roof, and everyone else will follow. Until then, we will just have to listen to them whine about file sharing. File sharing is not the problem, price and quality are.
The people who really have something to lose are radio stations. They are a free music delivery mechanism, but why listen to a radio station that only plays music you like some of the time when you can download MP3s and listen to your favorites.
Perhaps the future weakness of the radio station is what really bothers the record companies. Radio stations are their promotion mechanism. Without them, they might have to actually produce a quality product to get people to buy it (instead of just playing it to the point that people feel vaguely uncomfortable when the radio is off because they are so accustomed to the sound of the song).
God given right to steal (Score:3, Insightful)
Re:God given right to steal (Score:4, Insightful)
> with services like Napster and that trading music is okay.
If people dont want their information taken, they shouldnt give it out to the public. Its as simple as that.
A song put on a cd or played on the radio will be heard. Thus by definition, you cant prevent it from being heard or known about. You lose control over it once you give it to someone else.
Dont like that? Dont give it out. Pretty damn simple.
> I'm in the entertainment industry myself and things are getting rougher
> by the day.
May i suggest, get a real job?
> Where does it say that all intellectual property should be free?
In the definition of 'intellectual property'.
You cant own an idea.
You can have an idea and keep it to yourself. But people making music arnt doing that (Or atleast not these people.) Even then, someone else will most likely eventually come up with that idea too.
So, what ever gave you the idea that intellectual property should _NOT_ be free?
Copyright was setup in the USA so that an artist can have legal stranglehold over a work for a limited time in exchange for that work being released for the benifit of mankind.
Looks to me like the artists are trying to renig on that deal. So i say fuck them. Im reniging on my part of it too.
You dont wanna give your works to the public after 17 years? Fine. I dont want to honour your copyright. You play fair, then I will.
> Artist have a right to get paid for their work.
Nobody has a right to get paid for anything.
If your work sucks, you have no right at all to force me to pay for it.
If your work isnt something i want, you have no right at all to force me to pay for it.
Does this give us the right to take it anyways? See my above point.
You play by the copyright rules and give your shit to us at the end of the 17 years, and THEN i will too play by the copyright rules and let you have those 17 years to profit.
> Taking that work without compensation is stealing.
No, taking something so you no longer have it but i do is stealing.
Taking someones work without compensation is copyright voilation.
Again, see my above point on copyright.
Until you care about the fact you are breaking copyright law by not giving us your works after 17 years, why should i at all care that im breaking copyright law too?
> Saying it is because the record companies over charge for CDs is rationalizing
> the act. If the government doesn't go after Napsterlike orginizations should
> they go after the individuals doing the trading?
Actually the government should go after the copyright holders and force THEM to abide by the law before worrying about us.
> It may feel like you are getting away with something by swapping music but in
> the long run you aren't. Without the influx of money the record industry will
> have to downsize.
So? As i said, they have no right to take money from me if i dont wish to give it to them.
As it seems, alot of people dont want the recording industry to have their money. In the USA, this means your company will fail. Its capitolizm. Dont like it? Move to china.
> It will be ten times harder for new bands to make it and the selection of music
> will be a fraction of what it is now.
The funny part is, there are more people that make music because they enjoy it, than there are people that make music to get rich.
I could care less if the 'i just want money' bands go away.
The real talent lies in those that know about music, not about wanting money.
> The record companies won't loose in the long run.
> They already got rich.
> You'll loose.
Bank robbers get rich too. So do companys like enron.
Guess your right, we lose, they win.
(That was my only sarcastic remark in this post by the
Even though the other dude is sort of trolling (Score:5, Insightful)
Let me first acknowledge that the person you're replying to is probably a little more extreme than a lot of people. BUT...
Even though I disagree with the way he expresses his opinion (telling you to get a job was rather childish) he is correct. The conglomerates themselves have invalidated the entire concept of copyright by acting outside the boundaries (and spirit) of the original intent of copyright. To ensure innovators innovated, and to insure that useful ideas weren't kept out of the public's hands forever... One of many measures essentially enacted to prevent the formation of an ultra-wealthy aristocracy.
They didn't intend to allow conglomerates to keep culturally enriching materials out of the public domain forever, yet that is essentially where we're at, and essentially the point of view you're arguing.
I can't wait for somebody to become a big star by financing his own recordings, promoting himself with unencumbered p2p delivered mp3 (or oggs or whatever) of songs, perhaps embedding his web-site name in one of the ID3 fields so people who really liked it could logon and buy cds, t-shirts, and tickets to see him in concert.
It will eventually happen, and if your music is good enough, it could be you. The critical difference is that somebody who becomes huge this way gets to keep all the profits, keep ownership (for a time) of the rights to his songs, and not be a slave to some idiot in a suit's concerns about your record and whether there are any "singles" on it. Every artist who sides with the RIAA and their ilk only lengthen their time of servitude under an oppressive regime.
Hello Apples, meet Oranges. A house is physical property. It can be taken away. A song can't be taken away unless I take all your tapes and erase your memory of it. The law plainly intends for copyrights to eventually expire, why can't you (and the RIAA) accept that rather than trying to sue everybody into submission?
Using your logic, how is playing the radio loud any different than Napster? I'm allowing many people to "enjoy" "your" music but only paying for one copy. For that matter, why is Napster different than a radio station? Sure, radio stations pay for the right to broadcast music, but the per song breakdown is pretty small. The reason the labels had this arrangement in the first place was PROMOTIONS.
Why won't the labels license Napster-like services to provide unlimited downloads? It would be the same as radio--better really because the user would hear exactly as much of what they are interested in as they want--lose interest fast? Decide the artist sucks? Erase file.
Every "starving musician" I've ever met who is vehemently anti-Napster invariably has some pie-in-the-sky dream of living the life of a rock star--fame, fortune, big money, and chicks everwhere. All of them desperately want to believe that those three things are achieved on merit, but they aren't. They're based on promotional budget, production budget, and access to good drugs.
Re:God given right to steal (Score:3, Insightful)
The huge number of people who say "I don't understand why people think Napster is OK" on every single RIAA related story should be proof enough that it's not all that pervasive.
Sure, I can agree with that. Though you do realise the current copyright system - even without the pirates (arr) - does not guarantee y
Clueless, not speechless (Score:5, Informative)
As part of the due-diligence, the major investors have publicly stated that they went to their lawyers, and the lawyers advised them to steer clear, because Napster was knowingly letting/encouraging people swap copyrighted material(this knowing/encouraging bit is important.)
They went ahead anyway, because they were greedy- the same reason people threw traditional rules-of-business out the window for countless dot-coms that(surprise) turned into dot-bombs.
Surprise surprise, people come knocking when they hear you funded a company which YOU KNEW(AND HAD BEEN ADVISED BY A LAWYER TO THE SAME EFFECT), WAS ENGAGING IN ILLEGAL ACTIVITY. It's called aiding and abetting, and in this case, the investors knew full well what was going on; it's not like someone was cooking the books and the investors honestly didn't know. EVERYONE at Napster knew they were doing something illegal.
If you want to be all "RIAA/MPAA sucks!", fine- but don't mix up centuries-old legitimate law. If you fund a business you know is a front for a drug operation, are you gonna be "speechless" when the DEA comes and arrests you? Actually, being speechless in such a case might be an excellent idea, particularly given your understanding of legal matters ;-)
YANAL (Score:4, Insightful)
You're assuming Napster was doing something illegal, which they weren't. No violation of the law was made further than any other system that indexes files and provides their locations.
Where is the causal connection established? (Score:4, Interesting)
The sales figures I have seen only indicate that sales are less than in the past. The causal connection made by this and other articles indicating that this reduction is a result of piracy is not entirely established. Record companies have blamed the Internet for their poor performance so many times that it has been accepted by many in the media as established fact.
There are many other possibilities to explain the sales reduction. Reduced interest in current, big name artists, increased interest in a splintered set of independent artists, the failure of the industry to adapt to new market formats (much as occurred when cassette tapes became popular), and the alienation of large parts of their customer base all come to mind as possible alternative explanations.
Many "old steel" industries are becoming frustrated that customers are not more like cattle. Tastes tend to change suddenly in ways that large companies have a hard time dealing with and it is easier to blame outside forces that to fix a difficult problem.
Perhaps their numbers won't be off for a fourth year if the recording industry drops its defensive stance and instead recognizes that the market has changed and that they need to adapt. At some point shareholders have to begin asking what else the industry is doing to increase revenue besides suing everyone.
Record Labels Sue Napster Mom (Score:5, Funny)
"Mrs. Fanning knowingly nurtured and encouraged her son, who in turn facilitated file-sharing among millions of internet users, who in turn made unauthorized reproductions of our clients' copyrighted works," said Universal lawyer Duey Screw. "What began as a 'good time' with Mr. [Robert] Fanning grew into an international piracy ring. By intentionally providing food, clothing, and education to her son; by encouraging him to pursue his interests; and by failing to report inappropriate activity to the authorities, Mrs. Fanning indirectly caused $98 billion worth of copyright infringement."
Asked for comment, Shawn Fanning said that his mom "was just doing her job." He suggested, using terms we cannot quote here, that the record labels would regret filing the suit. "They just shouldn't go there", he suggested, because he had located revealing "pictures of that ___ ___ ___ that raised Hilary", he said referring to the mother of an authority in the Recording Industry Association of America.
A lawyer representing Mrs. Fanning complained that the labels had rejected his attempts to settle the matter out of court. "They want $98 billion, but my client doesn't have $98 billion. We offered several batches of home-made cookies, but the labels wouldn't bite."
Willy Sutton said, "It's where the money is..." (Score:3)
let others take the warning (Score:3, Insightful)
If I understand this right, I think it's great. Let the industry fight amoung themselves and certainly let them send each other the message that it's not OK to shut down a pitate organization by buying them.
And just to make my position clear: Is pirating wrong? Yes its is. But it also seems to be the lesser of two evils.
Are you really surprised? (Score:5, Insightful)
For decades now, the recording industry has used digital technology in the form of compact discs to extract vast sums from the public by price-fixing and the centralized control of content. Originally using the excuse that they had to recoup the expense of implementing the then new digital technology, the recording industry sold CDs at a premium that put the cost of CDs far beyond that of the records and tapes that the new technology was to eventually replace. Now, long after the maturity of digital technology has made CDs cheap and easy to produce, the record industry persists in demanding a premium from the public - with the rationale for elevated pricing this time based on the notion of recouping the costs of promotion.
Then as now, the big players in the music industry are an oligopoly with a strangle-hold on all things musical, one made possible by contract law and industry-favoring interpretations of copyright that keep both artists and the public in line; the only reason this worked was because of the technical inability of people to copy and transfer music that was for all intents and purposes their property among themselves.
The advent of the internet and file-sharing software have effectively broken that monopoly, providing the kind of socio-technological trend that always seems to trip up large corporate entities with their long reaction times in response to new trends. Predictably, instead of reacting to the new technology by redefining their business models to absorb and exploit it for everyone's benefit (cheaper CDs, CD-singles, cheap online transfers, etc.) they have turned to the courts and copy-protection technology in a two-pronged attempt to maintain a world in which their wheezing profit-engine is defined as every music user's reality. And the current lawsuit is unsurprising as one more manifestation of this strategy.
By suing investors, the massively well-funded legal apparatus of the record industry is, in effect, taking out insurance against more services like Napster springing up in the future. Unless the record industry loses, quickly and resoundingly, they will have established that providing funding for services like Napster or anything like it will, at the very least, lead to an expensive and protracted nuisance suit.
The only thing surprising about the lawsuit is either the creativity to be seen in embracing it or the desperation it implies on the part of the record industry.
Want to know why record sales are down...? (Score:5, Interesting)
So why do record companies sell less records these days? It's not because of downloading. They're doing it to themselves.
-S
The issue boils down to... (Score:3, Informative)
Vicarious infringement requires that if an entity can prevent copyright infringement and gains from the infringement, they can be held liable even if they don't know about the infringement. The idea (and it is a correct one) here is to hold owners responsible for actions they have control over. There is a long legal history to this principle, and it applies to most areas of conduct liability, not just copyright infringement.
The real question here is the extent of Hummer Winblad's amount of control of Napster. Since the CEO was a Hummer Winblad partner (Hank Barry) and John Hummer himself was on the board, it doesn't look good for them. And it sounds to me like they knew the risks when they got in : Original announcement [thestandard.com]
This kind of unsubstantiated bullshit.... (Score:3, Insightful)
Just burns me up... how the hell do they know that "internet piracy" caused the decline in CD, record and cassette sales? Have these morons ever considered that the worldwide economy has been in the tank during the same period of time they're talking about? Maybe people are buying less CD's because they can't freaking afford them.
I'l bet all those out of work ex-Nortel employees damn sure aren't rushing out to buy dozens of CD's per pop....
An Obvious Solution... (Score:4, Funny)
After all, you can't have piracy without a product to pirate, right?
So the labels and the RIAA ARE RESPONSIBLE FOR PIRACY!
This logic is no worse than the RIAA's...
You could also argue that the excessive prices charged for music CD's encourage piracy and that suing people for it after the fact is in fact entrapment, which is illegal...
More convoluted and perfectly legitimate logic comparable to the RIAA's...
Let's face it, folks, there is no logic involved in any action by these people. It is naked greed and power grabbing, just like everyone else in industry, religion, education, government, etc.
The only proper response is cut their balls off...
any way you can. Legally, illegally, whatever.
I just had a relevant discussion with someone today who pointed out that journalistic investigations always only go so far before they run into the government as those responsible for whatever is being investigated (name the crime, government or the cops are behind it somewhere down the line). He said the journalists are always forced to back off. I said as long as you use ethical journalism, you will lose. You have to use ILLEGAL means to combat ILLEGAL actions by LEGAL authorities. That means a journalist has to wiretap, trail people around, break-and-enter, and hack computer systems - just like the government will do to anyone investigating them. If you aren't willing to go all the way, you're just wasting your time - go home and forget about it.
My friend pointed out that journalists don't want to go to jail. Well, I told him, that's the price you pay for resisting the state. If you can't do the time, don't do the crime... The Arab saying is, "When you draw your sword against your Prince, you must throw the scabbard as far away as possible."
I did eight years for picking up a gun to destroy the state. Now I'm using different tactics. I'll see you, statist assholes, next time - but you won't see me...
Re:Its all for the money - and lots of it! (Score:2)
By the time of its close, Napster had contributed to billions of separate acts of copyright infringement, according to Monday's complaint. The record labels are seeking punitive damages of no less than $150,000 per violation of copyright, among other awards.
Let me check my math here:
~1 billion (1,000,000,000) acts
x $150,000 per act fine
==========
~$150 TRILLION dollars ($150,000,000,000,000)
Two Things:
1) Does this amount of money even exist?
2) Did anyone else here Dr. Evil
Re:Its all for the money - and lots of it! (Score:2)
Now that's a good ROI...