Lawsuit Over Whether Napster's Investors Are Liable Heading To Court

from the not-a-good-idea dept

In a case that could have serious implications for venture capitalists and other investors in companies, the lawsuits that Universal Studios and EMI filed last year against Napster’s investors (including their own rival label Bertelsmann) have been combined into one case that is set to get under way next week. The two labels accuse the investors of being responsible for copyright infringement by keeping Napster in business longer and for inspiring “copycat” sites like Kazaa and Morpheus. Beyond the basic problem that (again) they are blaming the tool and not the actual illegal action, this also opens up a whole can of worms concerning any investment. The investors simply invest in the company, and while they may have some influence over what the company does, to blame them for illegal actions performed by users of a product seems to go well beyond reason. That’s like saying we should blame investors in Ford if a Mustang is used to run someone down. It’s going beyond blaming a tool that was misused and even beyond blaming the company or its management for creating a tool that could be misused, all the way towards blaming those who kept the company in business with their money. Clearly, without Ford’s investors, the company would never be where it is today, and no one would be able to have Mustangs to run over others. Therefore, they must be guilty of manslaughter by association. In fact, why not take it one step further. Perhaps all of Ford’s customers should be responsible (even if they only did legitimate actions with their vehicles) because they put money in Ford’s bank account letting them stay in business as well. The argument is ridiculous and hopefully the judge will see it the same way.

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