e ~apsterJs activity, which activity constitutes the indexing and creation of links to
COMPLAINT
9
infringing music files but Defendants have failed to exercise such supervision and control. As
a direct and proximate result of such failure, Napster users have infringed plaintiff's copyrights
in the Copyrighted Recordings as set forth above.
31. Defendant has substantially contributed to the unauthorized copying and
distribution of Plaintiff's music by providing the financing for the maintenance and continued
operation of the Napster site and facilities for known infringing activity.
32. Defendant BERTELSMANN has substantially contributed to the international
unauthorized copying and distribution of musical sound recordings by encouraging, speaking
positively, and by publicly partnering with and becoming a major shareholder in, Napster, Inc.
33. Defendant BERTELSMANN has substantially contributed to the international
unauthorized copying and distribution of musical sound recordings by investing substantial
sums of money, supporting, guiding, encouraging, and promoting Defendant Napster, Inc. for
it's own future benefit.
34. Since at least November 12, 1999, Defendants have had knowledge of the
widespread infringement of copyrights by Napster users by virtue of a letter to Napster from
the RIM (Recording Industry Association of America.) Moreover, Defendant BERTELSMANN
has knowledge of Plaintiff's copyright rights by virtue of Plaintiff's repeated letters to
BERTELSMANN'S partner Napster, Inc.. True copies of letters dated May 30, 2000, June 1,
2000, June 15.2000 and June 16, 2000 are attached hereto as Exhibit "D" and made a part
hereof by this reference. Despite this knowledge and repeated requests to cease and desist,
Defendant knowingly partnered with and became majority shareholder of, Napster, Inc. and in
said capacity continues to allow Napster users to violate Plaintiff's copyrights and otherwise
promote the use of the Napster software. .
35. Through its conduct averred herein, Defendant has engaged and continues to
participate in the business of knowingly and systematically inducing, causing, and materially
contributing to the above-described unauthorized reproductions and distributions of copies of
~ .
COMPLAINT
10
the Copyrighted Recordings referred to herein and thus to the infringement of plaintiff's
copyrights.
36. Each infringement of plaintiff's rights to the Copyrighted Recordings set out herein
constitutes a separate and distinct act of infringement and contributory copyright infringement.
37. The foregoing acts of infringement and contributory copyright infringement by
Defendant has been willful, intentional, purposeful, and in disregard of and indifference to the
rights of plaintiff.
38. Napster's conduct and BERTELSMANN's conduct, as averred herein, constitutes
contributory infringement of plaintiff's copyrights and plaintiffs' exclusive rights under copyright
in violation of the Copyright Act, 17 U.S.C. § 106, 115 and 501.
39. As a direct and proximate result of the contributory infringements by Defendants, of
! plaintiff's copyrights and exclusive rights under copyright, plaintiff is entitled to damages and to
Defendants' profits pursuant to 17 U.S.C. §504(b) for each infringement.
40. Alternatively, plaintiff is entitled to the maximum statutory damages, pursuant to 17 !
U.S.C. §504(C ) in the amount of $100,000 with respect to each work infringed, or such other I
amounts as may be proper. Plaintiff is informed and believes and on that basis alleges that
such statutory damage shall exceed $10,000,000
41. Plaintiff is further entitled to his attorneys' fees and full costs pursuant to 17 U.S.C.
§505.
42 The probable and foreseeable result of Defendants' wrongful conduct has been
and will continue to be to deprive plaintiff of the benefits of selling plaintiff's Musical
I Compositions and other related prod ucts, to deprive plaintiff of goodwill. and to injure plaintiff's
relations with present and prospective customers.
43. Plaintiff alleges that it has lost, and will continue to lose. substantial revenues from
the sale of its Musical Compositions and related products and will sustain damage as a result
~ .
COMPLAINT
11
of defendants' wrongful conduct has also deprived and will continue to deprive plaintiff of
opportunities for expanding goodwill.
44. Defendants' willful conduct, as set out herein, is causing and, unless enjoined and
restrained by this Court, will continue to cause plaintiff great and irreparable injury that cannot
fully be compensated or measured in money. Plaintiff has no adequate remedy at law.
Pursuant to 17 U.S.C. § 502, plaintiff is entitled to a preliminary and permanent injunction
prohibiting further contributory infringements of plaintiffs copyrights.
45. Defendants conduct is despicable, malicious and done with ill will toward plaintiff
with utter disregard to his injury and damages and as such plaintiff is entitled to Punitive and
Exemplary Damages in the sum of 20% of the money it invested in Napster, Inc. in the sum of
$10,O00,000, as well as 20% of all revenue BERTELSMANN generates through Napster, Inc.
in an amount subject to proof at the time of trial.
SECOND CAUSE OF ACTION
FOR VICARIOUS COPYRIGHT INFRINGEMENT
[Against at' Defendants)
46. Plaintiff repeats and realleges paragraphs 1 through 45 with the same force and
effect as though set out here at length .
47. At all times relevant herein, Defendant had the right and ability to supervise and
control the infringing conduct of Napster users from October 30, 2000 to present by refusing to
finance Napster's activity, which activity constitutes the indexing and creation of links to
infringing music files but Defendants have failed to exercise such supervision and control. As
! a direct and proximate result of such failure, Napster users have infringed plaintiff's copyrights
in the Copyrighted Recordings as set forth above.
48. Defendant has substantially contributed to the unauthorized copying and distribution
of Plaintiff's music by providing the financing for the maintenance and continued operation of
th~apster site and facilities for known infringing activity.
COMPLAINT
12
49. .Defendant BERTELSMANN has substantially contributed to the international
unauthorized copying and distribution of musical sound recordings by encouraging, speaking
positively, and by publicly partnering with and becoming majority shareholder in, Napster, Inc.
50. Since at least November 12, 1999, Defendants have had knowledge of the
widespread infringement of copyrights by Napster users by virtue of a letter to Napster from
the RIM (Recording Industry Association of America.) Moreover, Defendant BERTELSMANN
has knowledge of Plaintiff's copyright rights by virtue of Plaintiff's repeated letters to
BERTELSMANN'S partner Napster, Inc.. True copies of letters dated May 30, 2000, June 1 ,
2000, June 15, 2000 and June 16, 2000 are attached hereto as Exhibit "D" and made a part
hereof by this reference. Despite this knowledge and repeated requests to cease and desist,
Defendant knowingly partnered with and became majority shareholder of, Napster, Inc. and in
said capacity continues to allow Napster users to violate Plaintiff's copyrights and otherwise
promote the use of the Napster software.
51. Through its conduct averred herein, Defendant has engaged and continues to
participate in the business of knowingly and systematically inducing, causing, and materially
contributing to the above-described unauthorized reproductions and distributions of copies of
the Copyrighted Recordings referred to herein and thus to the infringement of plaintiff's
copyrights.
52. Each infringement of plaintiff's rights to the Copyrighted Recordings set out herein
constitutes a separate and distinct act of infringement, contributory copyright infringement and
vicarious copyright infringement.
53. Defendant BERTELSMANN substantially contributed to the international
unauthorized copying and distribution of musical sound recordings by making Plaintiff's music
available for copying to other Napster users.
54. Defendant has derived substantial financial benefit from infringements of plaintiff's
co~ghts by Napster users in that, among other things, BERTELSMANN will reap substantial
COMPLAINT
13
financial benefit from its share of 40% of the fees that will be collected by Napster users in the
future when said system is put into place. Additionally, BERTELSMANN is painting Napster
with a veneer of credibility that will attract additional users to Napster, users from a fee will
ultimately be extracted. None of this profit could have occurred but for the notoriety Napster
has achieved in the press and its popularity with the public. As such, BERTELSMANN will
reap a profIt from the widespread copyright infringement of Napster and its users.
55. Plaintiff is also informed and believes that Napster and BERTELSMANN does now,
and intends to further in the future, solicit advertising and charge fees for advertising on
Napster. Plaintiff is informed and believes, and on that basis alleges, that the number and
amount of these fees is related directly to the number of users which Napster and
BERTELSMANN are able to attract, which in turn, depends on Napster and BERTELSMANN's
facilitation of and participation in the unauthorized reproduction and distribution of plaintiff's
sound recordings. Napster's rargest investor, Defendant BERTELSMANN eCOMMERCE
GROUP will benefit as an owner / shareholder of 40% of Defendant Napster and will therefore
be entitled to profits commensurate with this percentage of the access fees which will be
charged users and advertisers. Thus Napster and BERTELSMANN have undertaken a
purposeful strategy to make its company more attractive to potential advertisers and investors
by infringing on Plaintiff's rights.
56. The foregoing acts of infringement by Defendant BERTELSMANN and Napster
have been willful, intentional and purposeful, in disregard of and indifference to the right s of
plaintiff who is therefore entitled to punitive and exemplary damages against all defendants in
the sum of 20% of the $50,000,000 invested by BERTELSMANN in Napster, in the sum of
$10,000,000; in an amount subject to proof at the time of trial.
57. Defendant's conduct, as alleged herein, constitutes vicarious infringement of
plaintiff's copyrights and exclusive rights under copyright. in violation of 17 U.S.C. §106, 115,
and~1 ~ the Copyright Act.
COMPLAINT
14
58. As a direct and proximate result of defendants' vicarious infringement of plaintiff's
copyrights and exclusive rights under copyright, plaintiff is entitled to damages and De!endants
profits pursuant to 17 U.S.C. § 504 (b ) for each infringement.
59. Alternatively, plaintiff is entitled to the maximum statutory damages in the amount
of $100,000 with respect to each work infringed, or for such other amounts as may be proper
under 17 U.S.C. §504(c ). Plaintiff is informed and believes and on that basis alleges, that
such statutory damages shall exceed $10,000,000.
60. Plaintiff is further entitled to attorneys' fees and full costs pursuant to 17 U.S.C.
§505.
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