Bertelsmann faces $17 billion suit

By | February 21, 2003 at 12:00 AM

Songwriters and music publishers have filed a $17 billion lawsuit against German media giant Bertelsmann AG, claiming that their investment in Napster constitutes copyright infringement.

The case was filed late Wednesday in U.S District Court of New York. Plaintiffs in the suit include songwriting duo Jerry Leiber and Mike Stoller, whose hits include “Hound Dog” and “Stand by Me,” and music publisher Peer International Corp.

Of note is that the lawsuit is seeking class-action status for other music publishers represented by the Harry Fox Agency. If this were to happen, BMG Music Publishing, which is a division of Bertelsmann, would then be a plaintiff in the suit. A Bertelsmann spokeswoman declined comment.

The suit alleges that Bertelsmann’s $50 million investment and strategic partnership with Napster formed in October 2000 “kept the infringing Napster service alive.” The suit claims that because of Bertelsmann’s funding, Napster users continued to download copyrighted works for free until July 2001. The plaintiffs are seeking the maximum statutory damages.

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