EMI adds CEO to its lawsuit against MP3Tunes
EMI has named Michael Robertson, the CEO of MP3Tunes, to its copyright suit against the company (MP3Tunes lets you rip your CDs and then facilitates transferring or streaming them to all your computers and devices). They've named a sum that will bankrupt Robertson, costing him his house, car, kids' college funds, etc. As Robertson says, this is clearly intended to intimidate execs and investors in companies that add value to digital music:
This week in a New York court attorneys for EMI made the argument about why I should be personally liable as CEO of MP3tunes. They are suing not only MP3tunes, but also me personally and are going after my home, cars and kids college funds in their suit. I'm fighting back because it's wrong to go after someone simply because they are the CEO and MP3tunes is not about piracy. We let people listen to their own music collection (not others). Unlike most others online, we are strict about not sharing music between Lockers. I'm not alone in having to personally face the attacks of music attorneys. Besides misguided suits against end users the labels are personally suing other CEOs in a calculated strategy to try and intimidate company executives and investors from doing digital music start-ups.Link (Thanks, Michael!)
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Here's hoping he's more successful fighting this suit than he was with MP3.com's.
It certainly does seem over the top to sue him personally; I had thought that one of the (few) benefits of the corporate system was that it assigned all liability to the "person" of the corporation, rather than the individuals running it.
"They've named a sum that will bankrupt Robertson, costing him his house, car, kids' college funds..."
As Robotech Master said, if you are ruined because your company it killed, then you didn't structure things properly to begin with. Oh well.
That's exactly what a corporation does. LLCs as well. The only time your personal assets are up for grabs in a business is if it's registered under a trade name. I don't see how they couldn't throw this case out based on that.
On the other hand, I kind of hope this is a "piss the wrong person off" kind of situation, even though it'll suck for Mr. Robertson.
Next on the list of people for the music industry to sue:
1. Manufacturers of audio speakers for reproducing the copyrighted works into the air that anyone could randomly hear, and
2. People who whistle.
@ #2 / #3
I've been through this lately myself because of an IP issue... Properly structured corporations do two things:
1- Give a 'corporate veil' for your actions, so that the company is sued for any sort of actions - not the individual
2- Take out insurance contracts on top executives, and sign indemnification agreements where the corporation will assume liability and legal expenses
In this specific case, EMI is trying to make the CEO personally liable as a person/citizen, not just as the CEO of the company. No sort of corporate structuring can handle that -- the only thing that can handle that is the insurance/indemnification agreements where the company promises to cover the legal costs or losses to $x.
The MP3tunes CEO needs to hope that EMI is making a weak case to 'pierce the corporate veil'.
Damn! Out of most company types Michael Robertson GETS the ideas behind digital media, and has since day one, how MP3.com ended up was an atrocity ( I had a 'band page' there for some spoken word stuff I was doing, and really miss the entire space) but he followed the courts ruling and moved on, and stayed away from doing the same mistakes. I think the big record companies are being outright vindictive now because of his involvement in this field. Sue his company, if you feel the company is doing wrong, thats a legit right to settle such grievances in court, but going after him personally because he is the CEO, just opens the door for say me to go after Eric Nicoli (CEO of EMI) for using the law as a personal bully for his own ends.
If the end result of the RIAA is to abolish corporate personhood, then I'm starting to feel a lot more positive about the RIAA...
It's an unlimited supply
And there is no reason why
I tell you it was all a frame
They only did it 'cause of fame!
Who?
EMI!
They don't like innovation, especially when they didn't think of it and aren't getting a slice... They basically want MP3Tunes shut down, or surrendered to them so they can do it themselves and in the process make it suck with ridiculous amounts of DRM and other such suckery... no doubt it'll be tied to windows in some way...
Michael @ 7: Seconded. As sad as it is that they are going after this poor bastard, I'd trade him in in a heartbeat for the chance to go after the execs of Halliburton, Chevron, Exxon-Mobil, Coca-cola, etc. etc. On the whole, the legal protections given to CEOs by corporate law have caused far more trouble than they're worth.
A corporation (be it a "C" corp, an "S" corp, or an "LLC") sets a veil between the assets of the corporation and its board and their personal assets. It is often referred to as the "corporate veil".
A judge can decide to bring that veil down if in her/his judgement the corporate entity is underfunded, or if the board (or at least some of its members) have committed some crime. (Think of Ken Lay and Enron for an example.)
It seems a little misplaced here for EMI to go for this up front, but during the suit, if it makes it to the court, they could make a case for his personal assets IF the company is found to be infringing AND the company lacks adequate assets to cover any monetary award. (That is why this seems so out of place--it hasn't even been heard.)
If Mr. Robertson and his corporate and personal attorneys are smart about this, they will point out that the company provides a service that the record companies themselves do not offer. And also show how the service is not sharing the files willy-nilly, only with the user, they may have a chance.
The problem with this service, as I see it, is that I can take any CD, whether I own it or not, and it can be made a part of my locker. I can also burn a copy of a CD, return it to where I bought or borrowed it from, and still have the music in my locker. (Not that I see anything wrong with that, as I am sure many people borrow CDs from friends and burn them for themselves.)
It'll be interesting.
~Woadan