A multi-million dollar lawsuit against former Napster 1 investors Bertelsmann and venture capital firm Hummer Winblad has been given the go-ahead by a San Francisco judge.
District Judge Marilyn Patel dismissed motions to dismiss the suit, filed by Universal Music, Capital Records and several music publishers, including those for the songwriting team of Jerry Leiber and Mike Stoller, famous for songs such as "Hound Dog" and "Jailhouse Rock. The suit alleges that by investing in Napster the defendants cost the music industry $17 billion in lost sales.
Bertelsmann made a $90 million investment in Napster in 2000, which it is claimed kept the company in operation for eight months longer than it would have been able to under its own steam. Hummer Winblad made a $15 million investment in the then beleaguered peer-to-peer sharing company.
Judge Patel issued the injunction against Napster that closed it down in 2000. She said the plaintiffs in this suit "had the right to try to prove their allegations," Reuters reports.
Describing the plaintiffs? claims in the case as "maybe unfounded," Patel said "such questions must be left for resolution upon motions for summary judgment or at trial".
Napster was eventually acquired by Roxio and was relaunched as a paid service last year.