Avast, Ye Brigands

Bertelsmann may escape the legal wrath of its music industry peers, thanks to a decision rendered by Germany's top court on July 25. The Federal Constitutional Court in Berlin ruled to block delivery of a $17 billion lawsuit brought by other members of the recording industry over Bertelsmann's financial support of Napster. The block is good for at least six months and could be permanently renewed upon full examination of the lawsuit. Bertelsmann has already filed in US federal court in New York to have the suit dismissed.

At issue for German jurists are the constitutionality of the lawsuit and questions over the motivation of the plaintiffs. Allowing a foreign lawsuit to be pursued in Germany might violate Bertelsmann's rights, the court stated, suggesting that the suit's ultimate purpose could be to gain market share for other record labels. "If lawsuits in [foreign] courts are obviously misused to bend a market player to one's will by way of media pressure and the risk of a court order, this could violate the German constitution," read an official statement from the court. Bertelsmann is the parent company of the Bertelsmann Music Group (BMG), one of the music industry's "Big Five."

During Napster's protracted and ultimately futile ordeal in a US court, Bertelsmann settled its dispute early and made a private investment in the company, with the hope of leveraging its technology and brand recognition for future online ventures. In 2000 and 2001, Bertelsmann invested more than $100 million in Napster, which at its peak had more than 60 million users. The strategy backfired on former Bertelsmann CEO Thomas Middelhoff, who announced his resignation from the helm of the German media conglomerate July 29, 2002.

The Recording Industry Association of America (RIAA) has stepped up its pursuit of copyright violators, with over 900 subpoenas issued by the last week of July. Although the industry's executives and attorneys promised to go only after "big fish," the antipiracy campaign is catching everyone from grade-school children to grandmothers. "We're hearing from a lot of people saying, 'Oh my God. I'm scared. What do I do? How do I know if I've been found?'" Fred von Lohmann, senior intellectual property attorney for the Electronic Frontier Foundation (EFF) told reporters for the San Francisco Chronicle. In a sometimes amusing story ("Net Music Swappers Fear Wrath of Industry"), writers Benny Evangelista and Todd Wallack relate anecdotes from lawyers deluged by potential new clients, many of them scared of losing their homes and savings in copyright litigation. The music industry could collect up to $150,000 per violation from guilty tune swappers.

July's best fox-guarding-the-henhouse story comes from Louisiana, where Claiborne Parish sheriff Kenneth Volentine and the LaSalle Management group are under investigation for allegedly running an illegal CD-copying operation in the Claiborne Parish prison. Inmates in the institution could reportedly choose from a long list of CDs and have copies made for personal use at $3 each. "You'd just tell them what you wanted and they'd burn you a copy," said attorney Roy Maughan, Jr., who filed the suit for Utopia Entertainment, based in Baton Rouge. He said the proceeds from sales of CD copies went into "an inmate welfare fund." Chief technologist for the prison's CD-copying operation was said to be a former computer store owner serving a 12-year sentence for "aggravated incest."

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