The granddaddy of peer-to-peer music file swapping may have shed its moonshine music past, resurrected in 2003 as a pay-per-download online music store, but the courts won't be forgetting the shine running any time soon. Not with a federal judge rejecting motions to dismiss lawsuits charging Napster and two investors from the site's final days in the P2P world with keeping the old Napster alive enough to cost the music business a reported $17 billion in lost sales.
U.S. District Judge Marilyn Patel – the same judge who handed down the 2000 injunction against Napster, precipitating its ultimate doom as a P2P pioneer – held July 14 that suits against Napster, German music company Bertelsmann, and venture capital company Hummer Winblad could go forward through discovery phases, writing that the plaintiffs had the right to try to prove Napster caused those losses.
"Plaintiffs' allegations that defendants exercised full operational control over Napster during periods in which Napster remained a conduit for infringing activity may be wholly unfounded," Patel wrote. "... Regardless, such questions must be left for resolution upon motions for summary judgment or at trial."
Bertlesmann attorney Bruce Rich told reporters the company is sticking to its position that the allegations are false factually and that such falsity would be proven through the discovery phases.
The plaintiffs include record labels like Universal Music and EMI Group, music publishers, songwriters, and others. The lawsuits charge that Bertelsmann putting $90 million into Napster in a bid to salvage the P2P site kept it alive eight months longer than it would have lived otherwise, while accusing Hummer Winblad of abetting piracy by way of its $15 million investment and installation of a chief executive officer in 2000.
Napster finally went bankrupt two years ago. Software maker Roxio bought what remained of Napster and rebuilt it into a for-pay music store in 2003.
