Silicon Valley Media Law Blog

In thinking about today's Grokster settlement news (see prior post), you have to be sure to synthesize the fact that the Napster investor litigation is still dragging on in surreal fashion without any indication of an end on the horizon. So the RIAA appears to be suffering from a bipolar disorder of some sort.

Bertelsmann, which is a defendant in the Napster investor case because it loaned money to Napster, recently filed a motion for summary judgment, arguing that it cannot be held liable for infringing works that Napster would not have been liable for. It also argues that even if Napster were liable, Bertelsmann cannot be liable unless it also had specific knowledge of such infringing works at a time when it was able to block access to such works.

So at this point in the litigation, they're just trying to narrow what they could be liable for. Bertelsmann's motion papers make the point that:

"This clarification is particularly appropriate insofar as plaintiffs persist in floating an illusory 'billions in damages' balloon . . . ."

Thus they haven't yet reached the critical issue of whether Bertelsmann's involvement in Napster should result in any liability at all. Hummer Winblad joined the motion today. The summary judgment hearing date is scheduled for December 12th.

Maybe we can take the Grokster settlement as an admission by the record industry that they blew the opportunity with Napster, by taking the hard line that they did. Not that we expect that the Grokster defendants came out very well in the settlement -- published reports say they owe $50 million in damages.

But at least the record industry may have finally figured out that they need to actively spawn licensed services as a viable alternative for consumers, rather than leaving another void to be filled online and lining up the next round of lawsuits.

The Grokster3G.com domain that touts the new licensed service says:

"THE NEW GROKSTER 3G COMING SOON TO A DESKTOP NEAR YOU

A safe, secure & legal P2P experience...

NO Adware
NO Spyware
NO Bundles!
NO Viruses
NO Hassle
Just the best of what P2P has to offer."

The Grokster3G domain was just created on November 5th and is privately registered, so we'll have to wait and see what comes of it.