Bertelsmann makes first Napster settlement

Minor plaintiff drops suit for $50,000

By Lester Haines • Get more from this author

Posted in Financial News, 20th January 2005 14:21 GMT

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Bertelsmann has made its first settlement in the long-running Napster copyright infringement saga, the NY Times reports.

The German media group will pay $50,000 to Bridgeport Music of Southfield, Michigan to settle "accusations from Bridgeport Music... that it had contributed to copyright infringement by lending millions of dollars to Napster in 2000 and 2001".

This covers Bridgeport's legal fees to date after the company decided to stop pursuing Bertelsmann through the courts.

Bridgeport's lawyer, Richard Busch, said the litigation was "just not cost-effective; that's the sole reason." He added that "the decision to settle the case was not based in any way, shape or form on the merits of the case".

Bertelsmann faces continued legal action from the music industry's big-hitters - EMI and Universal Music Group included - arising from its $85m investment in Napster four years ago. It is charged with aiding online piracy by providing financial assistance to the then illicit music download operation.

Bertelsmann lawyer Bruce Rich said he would "entertain discussions of resolving the case with other plaintiffs in a fashion similar to the Bridgeport case, in which his client paid only the plaintiff's legal costs", the NY Times reports.

The music majors have no intention of dropping the case. Universal Music president Zach Horowitz told the paper: "While Bridgeport may not be a deep-pocketed plaintiff who can afford to go through the cost of enforcing its rights, the publishers and the major record companies don't fit in that category.They truly believe there are billions of dollars of damages they will ultimately be entitled to at the end of the process."

The Napster name was bought by Roxio, and is now entirely legit: recently it began to trade on Nasdaq as an independent company after Roxio's decision to offload its software biz and concentrate solely on music downloads.