Producer: Napster Fosters Infringement
S A N F R A N C I S C O, Nov. 29 -- A self-described “old hippie” and musicproducer has filed suit against Bertelsmann BMG’s e-commerce unit,alleging it is helping to finance Napster Inc.’s onlinemusic-sharing service that is threatening his business.
Matthew Katz, owner of record label San Francisco Sound, saidTuesday he is making the move to stop further support for Napster,which allows millions to download and swap copyrighted music overthe Internet.
“I’m hoping this will bring attention that musicians are notgetting what they should get,” he said.
Bertelsmann and Napster announced an accord in October thatwould allow Napster and Germany-based Bertelsmann to develop asecure membership-based music distribution system that willguarantee payments to artists on Bertelsmann’s label.
Playing Ball (and Hardball) With Napster
Bertelsmann and other record companies are suing Napster,alleging the Internet site contributes to copyright infringement byallowing users to access copyrighted works for free online. Therecord giant said it would drop its suit once a payment system isput in place. Other record labels have not taken Bertelsmann’sposition.
The 9th U.S. Court of Appeals in San Francisco is weighingwhether Napster can continue operating while the labels’ suit goesforward in a San Francisco federal court.
Katz claims the Bertelsmann-Napster accord includes a $50million payment to Napster, and gives Bertelsmann a 40 percentstake in the Silicon Valley company. Those payments, Katz said in aNov. 22 suit filed in U.S. District Court in San Francisco, arepropping up Napster so it can continue its service while the suitis pending.
Bertelsmann spokeswoman Melinda Meals declined comment on thesuit and noted that financial terms of the accord have not beendisclosed. A Napster spokesman did not immediately respond to aphone message.
Katz said he has a financial interest in bands such as JeffersonAirplane, Moby Grape and It’s a Beautiful Day.
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