RIAA, Stop Suing Tech Investors!

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.'"

Comments

Sue Intel! And AMD!

[Jurily]

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

Legislation to protect *investors*, hell no

[sam_handelman]

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.

Go for it!

[Anonymous Coward]

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!

[NewYorkCountryLawyer]

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.

Re:Limited Liability?

[SkyDude]

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.

Oh for crying out loud

[seeker_1us]

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.

Probably an even worse idea

[Dachannien]

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.

Re:Silly proposal...

[NewYorkCountryLawyer]

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.