Venture investor loses key ruling in Napster lawsuit
Record labels and music publishers won a round in their copyright lawsuit against Napster and its two lead investors when a judge ruled Wednesday that Hummer Winblad Venture Partners improperly urged its employees to delete e-mail about the pioneering song-swapping service.
If the 3-year-old San Francisco lawsuit reaches trial, jurors will be told they can infer that the e-mail would have hurt the venture capital firm’s defense, U.S. District Judge Marilyn Hall Patel ruled.
Record labels and music publishers claim that Hummer and another major investor, German media conglomerate Bertelsmann, helped Napster users violate copyright laws.
The deletion of e-mail came to light earlier this year. Two days after Hummer Winblad partners John Hummer and Hank Barry received subpoenas in a previous Napster-related lawsuit, a third partner, Ann Winblad, sent an e-mail to employees in June 2000 urging them to delete certain e-mail, according to case documents
“As we have all been required to surrender our Napster e-mails, this should reinforce compliance with our long-standing policies,” Winblad wrote to employees, according to court documents. “We do not retain e-mails, it is your responsibility to delete your handled e-mails immediately.”
Patel concluded that Winblad was directing employees to delete future Napster e-mail when the firm had a legal duty to preserve them.
“Hummer’s conduct amounts to gross negligence,” if not willful destruction, she wrote. Patel also said she would bar Hummer Winblad from raising some defenses that might have been undercut if it had preserved the e-mail.
An attorney for Hummer Winblad declined to comment.