Universal Music Group Slapped Down (Again) In Case Against Veoh
from the can't-sue-the-investors dept
The ongoing lawsuit between Universal Music Group and online video site Veoh is seen by many as a precursor to the various lawsuits against YouTube (or, more specifically, the "big" lawsuit from Viacom). So far, it's not going well for the content companies. In another lawsuit, filed by an adult video company, Veoh won easily. In the UMG case, the judge has already shot down Universal Music's arguments for why Veoh shouldn't get DMCA safe harbor protection.The latest news is that the judge has also dismissed Universal Music's attempt to include Veoh's investors as a part of the lawsuit. Universal's attempt to do this matched Universal's decision to sue Bertelsmann, a competitor who was also an investor in Napster. This made little sense to us at the time. Making an investor liable for actions of a company they invest in seems to open up a pandora's box of problems. Think of all the "shareholder lawsuits" you now see against management for corporate misdeeds... and turn that around, whereby anyone hurt by a company's actions could sue all of the investors. If investors are liable for a company's misdeeds, then suddenly it becomes a huge liability to invest in anything.
Eventually, Universal Music bought Bertelsmann... and rather than continue suing itself, Bertelsmann "settled." Bertelsmann (now UMG) later settled similar lawsuits brought by other labels, so the full issue of investor liability wasn't really addressed. In this case, the judge found that the only way Universal could make a credible claim that the investors were also liable was to show that they were actively encouraging increased copyright infringement after it was established that Veoh was infringing. That hasn't been established yet, at all, and it appears that the investors were actively pushing Veoh to block infringing content. So, Universal's claim against the investors has absolutely no merit whatsoever.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: investors, liability, venture capital
Companies: universal music, veoh
Reader Comments
Subscribe: RSS
View by: Time | Thread
Not 1 cent!
[ link to this | view in chronology ]
Go after the investors to put pressure on the company
[ link to this | view in chronology ]
think about this for a minute...
This is all just an initial thought, I haven't really considered any additional upsides or downsides. Comments please.
[ link to this | view in chronology ]
Re: think about this for a minute...
I'd agree with that, but what qualifies as squeaky clean? Between companies that sue for every possible reason (and a few not so possible) and the complete lack of personal responsibility in far too many individuals, "squeaky clean" is a relative term. There is a good chance that people will see that and just not invest at all.
I wouldn't want to pay the legal fees to go threw a lawsuit just because the RIAA is suing Google (and, hypothetically, investors) over a song playing in the background of a home video not even posted by Google of a two year old dancing.
[ link to this | view in chronology ]
Re: think about this for a minute...
If I invest in a company that is doing the right thing now, is it fair to come after me a couple years down the road when the company decides do start some shady practices and gets caught?
What about if the company has done nothing different, but the laws change to make what they are doing wrong?
And where do you draw the line? Only other companies/firms that invested? Individuals that invested directly? How about the stock market and people who buy into funds that include the company as part of a portfolio?
What about someone that had invested in the company, but sold there stocks last month, before the news hit this month that the company was doing wrong? Now, what about if the wrong doing started before, during, or after the individual bought or sold their stocks?
If the idea that investors can be sued for a company's misdeeds is upheld, then say goodbye to investors everywhere, and most likely to many companies as well.
[ link to this | view in chronology ]
LLC
These protections are in-place for a reason.
[ link to this | view in chronology ]
Corporations have all the rights as a person does, they should be treated the exact same way. Right now it's like the corporation is Voltron and it can simply escape all harm by separating back into the Lions.
Things need to change. People and companies need to be held accountable for what they do and what they invest in. For instance, if you invest in Walmart then YOU support child/slave labor. Plain and simple.
[ link to this | view in chronology ]
Re:
Things need to change. People and companies need to be held accountable for what they do and what they invest in. For instance, if you invest in Walmart then YOU support child/slave labor. Plain and simple.
Do you realize how ridiculous that sounds? Do you realize how that would effectively kill off pretty much all investment?
[ link to this | view in chronology ]
On the other hand, it might also give investors the incentive to consider something other than just the bottom line.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]