Napster Lose Court Case

A New York District Court has dismissed moves by Napster to force a label to hand over $1.3m (£0.82m) in legal costs dating back to a contested deal signed a decade ago.

Napster, now a subsidiary of Best Buy, had signed a deal with Rounder Records back in 2001 when it was still an unlicensed site and facing RIAA-led litigation. This deal with Rounder was then renewed in 2006.

The dispute relates to the original 2001 deal where Napster had secured sound recording rights but not mechanicals or publishing.

The Hollywood Reporter says, “The later 2006 agreement made it Rounder's obligation to secure those mechanical rights and indemnify Napster for any liability for failure to do so.”

That year, Napster was sued by composition copyright administration company MSC Music America for infringement relating to 344 works, the sound recording rights of 172 these having been included in the Rounder deal.

The case was resolved in 2008, but Napster had been pursuing Rounder to recover its accumulated £1.3m (£0.82m) in legal costs - but this was dismissed.

The Holywood Reporter notes, “Judge Crotty has concluded that the 2006 agreement superseded the 2001 agreement, and that the indemnification in the 2006 agreement was conditioned on Napster obtaining Rounder's prior 'written consent' for payments on claims. That didn't happen, so Napster has lost in court to a record company yet again.”