A group of music publishers and composers - led by two of Elvis Presley's most successful writers - are suing German media giant Bertelsmann for at least $17 billion, alleging the company's investment in Napster led to them losing massive royalties.
The complaint alleges that Bertelsmann "was fully aware of the critical role its funding played in facilitating infringement by Napster users" and therefore "systematically participated in, facilitated, materially contributed to and encouraged" illegal music file swapping, the New York Times reports.
Bertelsmann spokeswoman Liz Young said she was unaware of the suit. She added that even if she were aware of a complaint, the company would not comment on ongoing litigation.
Leading the suit, which was filed in New York on Wednesday, were Leiber and Stoller, the men who penned classics such as 'Hound Dog' and 'Jailhouse Rock'.
Napster closed last September. The file sharing application that at one time boosted 70 million users worldwide, and threatened to revolutionise the music industry, had been on its uppers for some time. A July 2001 court order forced it to shut temporarily in order to install new software and remove millions of illegally held files. Despite massive investment from Bertlesmann and massive restructuring, it never reopened.
Bertelsmann has attempted to cover itself against any potential legal challenge by pointing out the $100m was just a loan.
Napster eventually filed for bankruptcy protection, and its assets were sold to Roxio, a firm that produces CD-burning software.
Under the terms of its deal, Roxio has avoided any of Napster's potential liabilities.
Source: NME / Updated: Feb 21, 2003