EMI Continues Suing Innovators And Their Investors

from the someone-smack-them-down dept

Wed, Feb 25th 2009 8:03am — Mike Masnick

Warner Music has led the way for the big record labels to combat any innovation: it tends to sue every new startup that does anything remotely innovative with music, and as part of any "settlement" demands they either shut down or give a big equity stake to Warner Music. It's extortion by lawsuit -- and it's designed to prevent any sort of innovation. However, it looks like EMI is quickly following suit. Despite its new (non record industry) owners who declared that it was time for EMI to take a new approach to the industry, and even hiring some tech industry hotshots, the company just can't stop suing small innovative startups. It's sued MP3Tunes for letting people store and listen to their own, legally purchased music. It's sued Hi5 and VideoEgg for having user-uploaded videos that include music -- despite the DMCA's safe harbors that remove liability from them.

Even worse, however, is EMI's habit of trying to drag other parties into the lawsuit. For example, in the MP3Tunes lawsuit, beyond suing just the company, EMI sued founder Michael Robertson personally. The latest case is another example of that. EMI has sued both Seeqpod and Favtape. EMI is a bit behind Warner Music on this one. Warner sued Seeqpod last year. Favtape is similar to a number of other rather useful online services for creating playlists. It actually uses Seeqpod as its main search engine. Seeqpod is merely a search engine for music, looking across a variety of public sources for music. It doesn't host any of its own music, and has no way of knowing whether or not the music it finds is authorized or not. It's quite difficult to see how Seeqpod is doing anything illegal at all, and since Favtape is simply built on top of that, using Seeqpod's APIs, it's even less obvious how Favtape is doing anything wrong. In fact, this raises some very troubling legal issues: if you use someone's APIs, are you legally liable for the actions of the company powering the underlying service? That would create a massive chilling effect on innovation if true.

But, of course, EMI is making the situation even worse. Rather than just suing the companies, it's also suing investors and the founders personally. This isn't just highly unusual, it's a clear attempt to pressure these companies into settling, as no matter how legitimate your stance is, it's quite a scary thing to be sued personally, and potentially have personal assets at risk. Suing the founders personally is legal bullying. It's a clear abuse of the legal system to try to force a settlement, rather than an actual attempt to raise a legal issue.

Suing the investors is equally as ridiculous -- and is a clear attempt to try to get those investors to push the companies to settle. This tactic has been used in the past a few times by the big record labels, initially with Universal Music's attempt to sue Napster's investors. Most recently, Universal Music tried to do the same thing with Veoh, but a court slapped them down. Hopefully, the investors in question will point this ruling out to the court in question in asking for a quick dismissal. Furthermore, hopefully a judge will sanction EMI for abusing the legal process to bully these companies and individuals.

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Filed Under: innovation, investors, lawsuits, music
Companies: emi, favtape, seeqpod

13 Comments

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thomas, 25 Feb 2009 @ 8:17am

Why not?
The labels don't particularly care if they get sanctioned. If they manage to put other companies out of business in the process they are ahead of the game in their view. They can always find more lawyers and more judges who will see things their way. Legal extortion has become a fact of life in the american judicial system. The labels know that not much will happen to them for abusing and extoring, so why shouldn't they abuse it. It's legalized terrorism.
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Anonymous Coward, 25 Feb 2009 @ 9:37am

Re: Why not?
We need a way for someone extorted in this way to sue and win big (punitive) in retaliation. As in, go ahead sue me to try to scare me into settling, and when I prove it was without merit I win the lottery and have enough money to grow my business--nyah nyah.
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Anonymous Coward, 25 Feb 2009 @ 9:40am

Where is Anonymous ( http://en.wikipedia.org/wiki/Anonymous_(group) )when we need them?
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Anonymous Coward, 25 Feb 2009 @ 9:49am

Hmmmm....I didn't know you actually sue investors reliably. Can people who have been wrongly accused of file sharing by RIAA sue everyone involved with that, including the investors of all the record labels involved?
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Liberty Dave, 25 Feb 2009 @ 9:53am

That's the way it goes...
This just seems to be the way corporations and their lawyers seem to crush innovation, as the article mentions, as well as stifles competition.

Until we have some kind of massive overhaul of our legal system so these kinds of lawsuits aren't so easily filed this will keep happening.
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Anonymous Coward, 25 Feb 2009 @ 10:01am

Here's a quote from the President of EMI Digital Doug Merrill (Ex-Google CIO) when he was hired:

"I'm passionate about data," Merrill said during a phone interview Wednesday with CNET News.com. "For example, there's a set of data that shows that file sharing is actually good for artists. Not bad for artists. So maybe we shouldn't be stopping it all the time. I don't know...I am generally speaking (against suing fans). Obviously, there is piracy that is quite destructive but again I think the data shows that in some cases file sharing might be okay. What we need to do is understand when is it good, when it is not good...Suing fans doesn't feel like a winning strategy."

(source: http://news.cnet.com/8301-10784_3-9909513-7.html)

Here's MP3 founder's open letter to him that hasn't seen a response:

http://www.michaelrobertson.com/archive.php?minute_id=282
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Anonymous Coward, 25 Feb 2009 @ 10:07am

how hard is this?
Don't purchase ANYTHING from EMI or any subsidiary.
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interval, 25 Feb 2009 @ 10:27am

No... this is just crazy. The courts have to reform this nonsense at some point, its too much.
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Johnny Canada, 25 Feb 2009 @ 10:46am

Sue Record Industry
I have some hearing loss from to much loud music when I was young.

Can I sue the Record Industry, Owners, Founders and Investors for $ 100 million?
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Anonymous Coward, 25 Feb 2009 @ 1:15pm

Enough is enough
I have started a personal boycott. I no longer purchase any music, movies or other content. I hope others consider this move to bring the associations that make a mess of this whole industry to their knees and start a revolution and new way of thinking. If your business model includes having to sue your customers, something is really wrong. I think in this day and age, we can and must vote with our wallets. EMI and the other bastards will not get a single cent from me nor anyone that listens to me. As a huge fan of both movies and music, I must admit I don't miss either and have found valuable new ways to use my time. See ya suckers. Hope you have fun suing everyone. Wish I could say F&*% off to your faces.

Just me.
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Lawrence D'Oliveiro, 25 Feb 2009 @ 4:56pm

Punny Story
Sounds like they're using A Boy Named Sue just to get more of good old Johnny Cash.
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Gene Cavanaugh, 26 Feb 2009 @ 10:49am

Suits by the entertainment giants
EFF does a great job in fighting bad IP, but asks for funds in a "because we want the money" way.
Isn't it time for someone (EFF?) to start soliciting donations for specific harms?
Personally, I don't respond to "because we want it", but lay out a plan to fight this type of abuse SPECIFICALLY and I would likely donate (even though I am likely less able to do so than most!).
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Anonymous Coward, 29 Aug 2009 @ 3:23pm

"Even worse, however, is EMI's habit of trying to drag other parties into the lawsuit. For example, in the MP3Tunes lawsuit, beyond suing just the company, EMI sued founder Michael Robertson personally."

If limited liability can protect ford employees/executives from knowingly selling dangerous defected vehicles that cost lives then limited liability should certainly be able to protect these people from .... whatever it is Warner Music is suing them for. Otherwise this just shows the double standard in our legal system in favor of rich and powerful entities.

http://www.californiainjuryblog.com/2008/03/bisnar_chase_successfully_sett.html
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