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RIAA, Stop Suing Tech Investors! 114

Posted by kdawson
from the stifling-innovation-in-the-crib dept.
The RIAA isn't just suing tens of thousands of music consumers; they've also begun filing lawsuits naming the directors of and investors in tech companies that they believe contribute to copyright infringement. NewYorkCountryLawyer writes: "ZDNet urges the big recording industries to stop suing tech investors, and cites the draft legislation that I posted, which would immunize from secondary copyright infringement liability any work done by a director in 'his or her capacity as a member of the board of directors or committee thereof,' and any conduct by an investor based solely upon his or her having 'invested in any such corporation, including any oversight, monitoring, or due diligence activities in connection therewith.'"
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RIAA, Stop Suing Tech Investors!

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  • by Jurily (900488) <jurily@noSpAM.gmail.com> on Sunday March 01, 2009 @09:25AM (#27029201)

    Clearly there would be less copyright infringement without all these PC's lying around.

    • by dido (9125) <dido@imperi[ ]ph ['um.' in gap]> on Sunday March 01, 2009 @10:45AM (#27029605)

      This is more spot-on than the joker seems to realize. According to Bruce Schneier:

      I have long argued that the entertainment industry doesn't want people to have computers. Computers give users too much capability, too much flexibility, too much freedom. The entertainment industry wants users to sit back and consume things. They are trying to turn a computer into an Internet Entertainment Platform, along the lines of a television or VCR.

      (full article is here [schneier.com]) Computers

      • Re: (Score:3, Insightful)

        by Jurily (900488)

        This is more spot-on than the joker seems to realize.

        It wasn't a joke.

      • by benji fr (632243)
        In France we have a (quite famous now) guy who told about it a few years ago : Benjamin Bayart told us how the "free (as in speech) Internet" may become a "Minitel 2.0" (he means 'a centralized information-&-entertainment-distribution network')

        http://www.fdn.fr/Free-as-in-speech-Internet-or.html
    • by Z00L00K (682162) on Sunday March 01, 2009 @11:54AM (#27030063) Homepage

      It has even been considered here to require a license to have a computer since it's able to play broadcasted TV.

      Weird...

      • Re: (Score:2, Informative)

        by Hurricane78 (562437)

        Well, in Germany, for private persons, as far an I know, this is the law... Apart from paying for empty media like cd-rs and hds, and other stuff. So we should pay multiple times. But they of course still think they can sue us. ...Well... nobody pays the PC tax anyway. If the government guy comes to your door, you simply tell him you have no PC, and then to go fuck off before you beat him up.
        But usually, if opening the door naked does not drive them away quickly, letting him come in, closing the door, and t

        • Re: (Score:3, Insightful)

          by Hurricane78 (562437)

          Hey? Why the troll moderation?

          Oh. Right. Americans + sex = not funny? Really??
          Stop being prude. I might really do that to a very annoying salesman. And it would be very funny, to see him running away in fear. :D

          And the rest of by comment (about the PC tax) is a fact. At least I did not heat the law getting overturned.

      • by mishmash (585101)
        A licence is required if you have equipment capable of receiving broadcast TV live in the UK now. It is generally unenforced though in the case of those owning computers only, this makes a mockery of the TV licensing system. Arbitrarily enforced laws are very bad laws, they give too much power to those charged with enforcing them.
    • by kheldan (1460303)
      Why not sue the descendants of Von Neumann and Turing while you're at it, RIAA? Without digital computers, we'd all still be listening to nice, easily-controlled vinyl records, now wouldn't we? This story gets the "ASININE" tag, for sure. Time to put a bullet in the brains of the RIAA.
      • by kheldan (1460303)
        Oh, and BY THE WAY.. why doesn't Sony go and sue itself for contributing to copyright infringement? After all they're the ones who developed Compact Discs in the first place! Without them, we'd still be putting our vinyl music onto cassette tape, wouldn't we? For that matter, sue whoever invented cassette tapes! ASININE!!!
  • I should say - I think that this law suit is bollocks, obviously.

      But if you want to prevent this sort of thing, all you need is a law to indemnify inventors and distributors of technological devices and other services against contributory infringement. Why single out the investors and directors for legal protection?

      Investors and directors already have far too *much* indemnity against the actions taken with their money, generally speaking. This would set a terrible precedent, potentially causing tremendous harm to society in order to advance a very minor point of agenda.

    • by TubeSteak (669689)

      This would set a terrible precedent, potentially causing tremendous harm to society in order to advance a very minor point of agenda.

      Technology is not to blame for the harm it causes.
      The people who misuse the technology are to blame.
      The legal landscape should reflect this.

      Otherwise, why not sue the creator of the http, ftp, scp, etc protocols?
      Because all of those also enable file sharing.

      You don't sue gun, car, or brick mfgs because someone was injured with a car or a gun or a brick.

      • Re: (Score:3, Insightful)

        >gun

        It's been done before.

      • by rtb61 (674572)

        An enormously bad idea, in fact one of the very worst I have heard in a long time. Directors, executives and investors already get away with the most heinous crimes all while hiding behind corporate facades and in the end only the shareholders get fined. The whole concept that directors and the executive team can routinely escape the responsibility for their decisions, whilst they earn millions of dollars as a result of them is obscene.

        In fact legislation should be going in the opposite directions, direc

    • by eleuthero (812560)
      How does this lawsuit impact the exceptions to the DMCA in the US? Does it create a loophole allowing the RIAA to sue even more people with an otherwise obviously overt right to do their research / make their copies?
    • You'd think that the "corporate shield" would protect these investors from such suits. I guess they could argue that if a company like Napster got no VC funding in the first place they would not have built the infringing network. The VC that funded Napster got very rich and bailed just before the litigation started. I think that's what they're trying to stop. Look how the Apple is going after Psystar's list of investors because they want to punish not just the company, but the people that allowed them fundi

  • Go for it! (Score:5, Interesting)

    by Anonymous Coward on Sunday March 01, 2009 @09:31AM (#27029219)

    RIAA, we know you're running out of money, so by all means start suing well-heeled investors instead of grandmothers living off small pensions.

    Hell, I'll even recommend a few law firms that bill starting a grand an hour to help you out.

    • Re:Go for it! (Score:4, Insightful)

      by jonbryce (703250) on Sunday March 01, 2009 @12:20PM (#27030241) Homepage

      If the RIAA starts suing well-heeled investors, then these investors will stop investing money in American companies, and take their money elsewhere.

      Then who's going to pay your grandmother's pension? And who's going to give you a job so you can save up for your pension?

      • Well-heeled investor types generally don't like getting told what they're allowed to do with their money. Especially when they're told they're not allowed to put it somewhere where they think it will make them lots of money.
        • Re:Go for it! (Score:5, Informative)

          by NewYorkCountryLawyer (912032) * <rayNO@SPAMbeckermanlegal.com> on Sunday March 01, 2009 @12:46PM (#27030505) Homepage Journal

          Well-heeled investor types generally don't like getting told what they're allowed to do with their money. Especially when they're told they're not allowed to put it somewhere where they think it will make them lots of money.

          The reality is that 'investor types' could care less about such matters. They put their money where they believe it will make the most money relative to the risk. And if the making of the investment were to put at risk more than the investment itself, but their own assets, they will steer clear. Even if the only exposure were the legal fees incurred in defending a frivolous lawsuit, that is a substantial risk which could run into the millions.

          The fact is, this is not a theoretical possibility. This is something that is happening now, ever since the judge in Napster incorrectly allowed the investors to be exposed to the record companies' frivolous claim. The investors did not choose to 'fight for a principle' or 'show the record companies what they could do with it' or show them how 'they don't like being told what to do'; they did what businesspeople do, they settled, to avoid the risk of continued litigation expense and exposure. Since then, some investors have balked at investing in digital music, preferring instead to put their money in other industries, where the competition are not a bunch of litigation-crazy freaks.

          • Since then, some investors have balked at investing in digital music, preferring instead to put their money in other industries, where the competition are not a bunch of litigation-crazy freaks.

            The dying companies attempting to kill the new companies before they arise. Anyone surprised services like Spotify is based in Sweden?

      • by smoker2 (750216)
        This comment was flamebait.
        Or do you suggest that without foreign investment, all your pensions are worthless ?
        If that's the case, you have bigger issues.
  • What's really needed are some laws that prevent the mafiaa from filing frivolous lawsuits in general. Officers and directors of a specific class of companies don't need special protection.

    Once that's accomplished, then it's up to the legislative bodies to determine what a pirate really is. And *then* various judicial bodies to hear test cases and rule on whether or not those laws make any sense. A long and drawn out process, but at least its somewhat transparent and allows all the various stakeholders to

    • There are already laws in place to protect against the filing of frivolous lawsuits. Why do we need more?

      If anybody believe the RIAA or anybody else has engaged in such conduct, they can protest it. Of course, it will be a high burden to prove that it's frivolous, but there's a reason for that, namely the principle of American Law that everybody gets a chance in court, and even if they can't prove their case, this doesn't mean they did wrong.

      • Re:Silly proposal... (Score:5, Interesting)

        by NewYorkCountryLawyer (912032) * <rayNO@SPAMbeckermanlegal.com> on Sunday March 01, 2009 @12:50PM (#27030525) Homepage Journal

        There are already laws in place to protect against the filing of frivolous lawsuits.

        Name them. (And once you do I will show you why every one you name is entirely ineffective to deter the filing of frivolous lawsuits.) The fact is there is big money in filing frivolous lawsuits and the Big 4 record companies are the best customers for this product. They have spent far more on it than they have on product development.

        • "The fact is there is big money in filing frivolous lawsuits"

          Well, we certainly agree on that statement. I've seen your nick around, and read a few of your posts, but other than your opposition to the RIAA, I'm really not aware of your stands on other issues. Since you indicate that you're a lawyer, and since you made the statement about frivolous lawsuits, I have ask, doesn't that put you in opposition to most tort lawyers? My state has been called "Tort Hell" for the habit of tort lawyers shopping for the

          • I am not aware of any other area of the law that has been flooded with "frivolous lawsuits". The only such flood of which I am aware is the flood of 40,000 frivolous lawsuits brought by the RIAA against ordinary working Americans.

            General tort law does not have the structural problem these cases have; in general tort cases there is an insurance company which has abundant resources with which to defend the insured.
        • by Garwulf (708651)

          "Name them. (And once you do I will show you why every one you name is entirely ineffective to deter the filing of frivolous lawsuits.)"

          You know, up here in Canada, we have a mechanism that works quite well. In a civil case, the loser is required to pay at least part, if not all, of the winner's legal fees by default. That means that while there are some frivolous lawsuits, something like what the RIAA has been doing would bankrupt them up-front.

          I've often wondered why the United States doesn't have such

  • IANAL but I thought the whole point of corporations was to limit investors' exposure to the amount of their investment. Otherwise your grandma could be sued for the Ford Explorer rollovers since she owns 100 shares of Ford stock in her retirement savings.
    • Re: (Score:1, Insightful)

      by ssintercept (843305)

      the whole point of corporations was to limit investors' exposure to the amount of their investment.

      i would have to rephrase that as: "...the whole point of corporations was to print money without any personal accountability..."

      • So? Given that people seem to sue for anything and everything, being threatened with the loss of everything you own because you own some shares in a company is excessive, and that basically the end result from taking away from that protection. There is some amount of personal accountability, it is limited to the value of those shares and nothing more.

    • by SkyDude (919251) on Sunday March 01, 2009 @10:17AM (#27029433)
      You've exaggerated the protection a bit, but you're correct. In most states, a corporation is a treated as a legal entity that can be sued, fined or sanctioned. The officers of a corporation are protected from suits, unless the plaintiff asks a judge to "pierce the corporate veil". Typically, judges are loathe to do this unless the plaintiff provides a significant amount of evidence that the officers knowingly participated in illegal activities.

      Delaware and Nevada are corporation-friendly states and such a suit probably would go nowhere if filed in those states. Other states may have activist judges that think corporate protection is meaningless, and allow litigation on flimsy evidence.

      As is often stated here, IANAL, but have formed two corporations and have paid a large portion my lawyer's kid's college tuition doing so.
      • The officers of a corporation are protected from suits, unless the plaintiff asks a judge to "pierce the corporate evil".

        Swapped them letters for you.

        • by SkyDude (919251)
          Except you shouldn't have done that. Anyone can be a corporation; your doctor/dentist/lawyer is probably a corporation for gawd's sakes.

          Corporation != evil. It's a tax tool, damn good one too.

          • by sowth (748135)

            A corporation is far more than a tax tool, since generally you can't lose more money than you put in. With a partnership or sole proprietorship, if your business goes under, you and your partners are generally liable for all its debts. It doesn't matter if someone screwed you or even if your partner cashed in all the business's assets and bank accounts and moved to some exotic island. What do you think will happen if your business is sued? What if business isn't as good as you thought it would be, and your

            • by SkyDude (919251)
              Well said. I just didn't the have energy to 'splain it all to some kid who's been taught to think that the word "corporation" is a synonym of "evil".
                • It was a joke. Sorry if that wasn't clear.
                • We were talking about the RIAA. Not evil my ass! ;)
                • I'm perfectly capable of understanding what you say.
                • I don't like being called a kid in a derogatory tone.
                • I'd like if you didn't make assumptions about what I've been taught to think.
                • I feel offended by the notion that I think (only) what I'm taught to think.

                If you want to talk badly, please at least CC me so that I know which misconceptions to correct and which correctly observed flaws in my thinking I need to fix.

      • Ugh, I hate modern corporateship. The point of forming a corporation is that the board and executives take legal and financial responsibility for the company in place of the owners (shareholders). The point is *not* to create a beast that can act without anyone taking responsibility.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      That's the general rule, but there are exceptions. Otherwise, it would be too easy to exploit the legal concept of limited liability corporations to avoid responsibility for your actions. IANAL either but I have come across plenty of people with "clever" ideas they think will limit tax or litigation exposure.

      For example, Acme Freight Inc could set up a different subsidiary for each truck it owns with $100 of share capital each, and transfer ownership of one truck and one driver's contract to each one. That

    • Re: (Score:3, Interesting)

      IANAL but I thought the whole point of corporations was to limit investors' exposure to the amount of their investment.

      IAAL... and I was under the same impression.

  • by Anonymous Coward

    Let's see...
    Any computer company (ibm, microsoft, apple)
    All online auction sites like eBay (because they are full of nothing but counterfeits)
    Any company that sells ethernet cards or cables.
    Oh hell, let's sue the mining industry because they produce the copper for the cables, because copper carries signals that could be carrying stolen bits of data.

    As you can tell it's pretty damn stupid.

    The only companies that profit directly from copyright infringement are in China. Anyone in the US profiting from copyrig

    • The only companies that profit directly from copyright infringement are in China.

      There are some people who'd say you spelled "Sweden" wrong.

      That is, if they had a sense of humor ;-)

  • by seeker_1us (1203072) on Sunday March 01, 2009 @10:48AM (#27029621)

    Lets think about how this would have affected the development of: the personal computer, the VCR, the tape deck, CD burners, torrent distribution, the xerox machine, the printing press...

    What's really going on?

    RIAA warfare against "piracy?"

    or

    The RIAA is attempting to buy legislation which would allow them to destroy technologies that allow independent artists to compete with them.

    • Lets think about how this would have affected the development of: the personal computer, the VCR, the tape deck, CD burners, torrent distribution, the xerox machine, the printing press...
      What's really going on?
      RIAA warfare against "piracy?"
      or
      The RIAA is attempting to buy legislation which would allow them to destroy technologies that allow independent artists to compete with them.

      That is their goal. To return to that glorious place they enjoyed for decades. A competition-free zone.

      • That is their goal. To return to that glorious place they enjoyed for decades. A competition-free zone.

        IANAL, but isn't that blatantly illegal? Like, a monopoly or something? If I'm right, then how is it that they aren't getting struck down left and right?

        • by sowth (748135)

          I would say it is a combination of:

          • The common problem of criminals violating the spirit of the law while not violating the technical letter of the law. In the same thread, "reasonable doubt" also comes to mind.
          • Corrupt politics. It seems to me the entertainment "industry" spends a higher percentage of their income on bri^W campaign contributions than other industries.
          • The RIAA has already essentially been given a monopoly. They get to "distribute fairly" all the license fees from compulsory licenses for ra
      • Re: (Score:3, Insightful)

        by whoever57 (658626)

        That is their goal. To return to that glorious place they enjoyed for decades. A competition-free zone.

        And that's why they are not going to stop -- it's life and death to them. The alternatives society has don't involve the existence of the RIAA and its member companies.

        Music publishers exist to identify music that large numbers of people would like and make it available. In the past, there was really only one way to do this and the record companies grew up around this method. We now have a much more e

        • So, anything at all that threatens the RIAA's hold over radio playlists must (in the eyes of the RIAA) be killed off at all costs, because the alternative is the death of the RIAA. They are like a cornered animal -- almost defeated, but at their most dangerous.

          Ideas? What they may do? What we can do? (I doubt they'll hire assassins, so I'll just focus on more probable issues.)

    • by Eastender (910391)
      You have beautifully summarized the overall objective that drives decision making and actions of the RIAA. Thank you.
    • by Yaotzin (827566)
      It's not a question of how this process would have affected anything, because the truth is that it has. Every information medium since the printing press has gone through the same process.
      Remember when they said radio was going to kill music? When televisions were going to be the end of radio? When VCRs were going to be the end of cinemas?
      People with power are afraid of change, and they will try to prevent it. That's simply the way things have always been.
  • by Dachannien (617929) on Sunday March 01, 2009 @10:49AM (#27029631)

    Suing individuals for ridiculous sums of money was like a playground bully beating up scrawny kids for their lunch money. It's easy, but there's not much profit in it.

    Suing investors who can actually afford to mount a legal defense for similar sums of money is like trying to beat up the principal for his lunch money. And he's been itching to try out that new paddle.

    • Suing individuals for ridiculous sums of money was like a playground bully beating up scrawny kids for their lunch money. It's easy, but there's not much profit in it. Suing investors who can actually afford to mount a legal defense for similar sums of money is like trying to beat up the principal for his lunch money.

      It's not the suing they're interested in. It's the sending a message to angel and venture capital investors, that they should invest in a different industry and stay far away from digital music, that they enjoy. If you're a VC, and you've got 100 different applicants from 15 different industries asking for a $250k investment.... it's pretty easy to decide to take a pass on the digital music startup and go somewhere else.

      • Except wouldn't it take only a few investors to stand up to the RIAA, get the charges toss out in court (and hopefully damages awarded to the defendant), and set a precedent which would strongly discourage future frivolous lawsuits?

        That is, supposing they don't just fold and settle out (I'm hoping that the insult and idiocy of such a lawsuit would be enough to discourage such).

        • offtopic - sig site (Score:3, Interesting)

          by TaoPhoenix (980487)

          Why is login restricted on your sig site? Should I apply for a handle?

          • by phorm (591458)

            It used to have a forum, but work has been keeping me too busy and it was getting nailed with all kinda of SPAM, so I've offlined it until I have a chance to add some better counter-measures.

      • The whole thing is like the playground bully trying to beat the teacher, those guys they are suing probably have more funds than the RIAAs annual budget for legal defense!
        What this means is the RIAA is in for a severe beating. Speaking of stupidity well applied this is the perfect example!
        It is one thing going after people who do not have the funds to defent themselves and another thing trying to anger the big boys. The first thing is morally wrong and may the rot in hell, the second thing is going into a c

      • It's the sending a message to angel and venture capital investors, that they should invest in a different industry and stay far away from digital music, that they enjoy.

        I'd generalize that to all investors and the entire music industry. They're saying that this is an extremely poor time to own stock in an RIAA member company.

    • Re: (Score:1, Interesting)

      by Anonymous Coward

      IANAL, so I'd like to ask those are AL in the USA:

      Couldn't the defendants sued by the RIAA (as described in this overall discussion) file for a judgement with prejudice, and thereby require the RIAA to pay all legal costs involved?

      Could the defendants then file complaints with the appropriate Bar Associations against the RIAA attorney(s) for having knowingly harrassed the defendants, and/or barratry?

  • I was at the Chicago Maritime Festival yesterday, and had dinner with a bunch of folks I know, mostly musicians. One member of a the group was very outspoken about how the DMCA and all had *seriously* screwed her group, and all indie musicians. From what she was saying, you have to pay the record companies... and if you're not signed, there is *no* *way* to sell, other than individually, via the online sources that sell by the track.

    In addition, the recent screwing by the RIAA & buddies to increase the

  • I think it's a sign of how weak and sickly our nation has become.

    This kind of behaviour is clearly rabid, and most civilized societies put a merciful bullet in the heads of rabid animals.

    Whether literally or figuratively, the RIAA needs to be put down.

  • They want to sue investors and tech companies? Good. It will be suicide for them. They'll have to sue AOL for funding the development of Napster. In so doing they'll have to sue Time Warner, a member of the RIAA. Not to do so will show bias between members and non-members, making all their claims questionable and if I'm not mistaken leave them open to a RICO suit.

    The news from the last year or two is misleading in saying Napster acquired AOL Music. AOL already held interest in Napster because they funded it

  • Can't be given to corporations? I know that RIAA is doing the "shoot yourself in the foot" task, but have to do it in each toe first? Whats next? Suing Obama?
  • I'm glad that they've finally been so blinded by their greed that they are finally attacking people who can afford to fight back.
  • Specifically immunizing investors from secondary copyright infringement suits is putting a band-aid on a festering wound. Number one, they're already covered by the corporate veil anyway, unless the RIAA buys the judges (in which case the laws won't help). Number two, the whole concept of secondary copyright infringement is something made up out of whole cloth by the courts; it doesn't appear in the statutes. So how about explicitly eliminating the doctrine of secondary copyright infringement entirely?

  • It seems that since they've already blown off both their feet, they're now moving on to what they have left. I'm pretty sure that was one of their arms right there.

  • (The more they sue, the quicker they are gone. Essentially, ZDnet tells them how to live longer... against their will... Well, I say: In this case, let them have their will. :D)

  • I can't believe the negative and adversarial mood this whole story has provoked here. Surely this is good ?

    they have widened their aim, but they have targeted people with similar resources now - people who can and will fight back.
    Remember, first they laugh at you, then they fight you, then you win. They've just started fighting for real.
  • Just bought a couple Linkin Park CD's from Amazon Marketplace. The disks were labeled "Like New" or "Very Good".

    Rather than spend $24 for the two I paid $9 bucks. The RIAA's cut? $0.00

    That's what they can expect moving forward.

    I don't like their attitude and I don't like their lawsuits against people.

    I have a couple more CD's to purchase in the next few weeks. The RIAA can expect more of the same.

    BTW, the Amazon CD's came as advertised.

    Thanks for playing :-)

  • I'm waiting for the headline, "RIAA Sues Everyone With Ears" ... and I only partially expect that The Onion will be the one to carry that.

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