EMI sues Bertelsmann over Napster

The EMI lawsuit, which alleges the German media giant perpetuated online piracy by funding Napster, follows a similar suit filed last month by Vivendi Universal's Universal Music Group. Both companies are joining a legal attack initiated in February by music publishers, which included rhythm and blues pioneers Jerry Leiber & Mike Stoller.

All three suits accuse Bertelsmann of perpetuating Napster's success by investing more than $100 million in the service. A spokeswoman for Bertelsmann had no immediate comment.

"By investing both millions of dollars and management resources in Napster--which was an illegal enterprise built on the unlawful distribution of copyrighted works--Bertelsmann enabled and encouraged the wholesale theft of copyrighted music," EMI said in a statement.

EMI Music, the world's No. 3 record company and home to Norah Jones, Coldplay and Radiohead, has been one of the more aggressive record companies in pursuing legitimate digital alternatives to combat piracy.

The music industry has blamed services like the now-defunct Napster and several similar networks for much of the recent slump in record sales.

"With this suit, EMI is fighting to protect our right to control and receive the benefits of our copyrights and the rights of our artists to share in and enjoy those benefits and be compensated for their valuable creative endeavors," EMI said in a statement.

Bertelsmann owns the BMG family of record labels, the smallest of the big five record companies, with artists like Elvis Presley, The Strokes and Aretha Franklin.

Like Universal, EMI filed its copyright infringement suit in U.S. District Court in New York.

In April, Universal and EMI Group sued San Francisco-based Hummer Winblad Venture Partners, the venture capitalists that once backed Napster.

At its peak, Napster had some 60 million users downloading songs using its service. But after a federal court ruled the service ran afoul of copyright laws, the service shut down in 2001 and eventually declared bankruptcy last June.

CD-burning software company Roxio has purchased the assets of Napster and plans to re-establish it as a legitimate pay service.

When Bertelsmann invested in Napster in 2000, it had originally said it wanted to build a legitimate music subscription service.

But the lawsuit filed by EMI alleges that in addition to financing Napster, the company helped perpetuate the service by serving in a management capacity.

"Bertelsmann shocked the music industry by throwing Napster a financial lifeline specifically to ensure the system did not shut down," the lawsuit said.

AOL Time Warner's Warner Music and Sony Music declined to comment on whether they would join the suit against Bertelsmann.

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