Music Biz Threatens The Red Cross

[bazooka]

Music Biz threatens Red Cross
Posted by Jeffrey Morse on December 21, 2004 at 6:44 PM (printer friendly)

From the U.K. Register
http://www.theregister.co.uk/2004/12/20/music_biz_red_cross/

Australian anti-piracy operatives are seeking a freeze on funds donated to the International Red Cross by a Vanuatu-based trust fund run by Sharman Networks - maker of Kazaa P2P software.

The recording industry is asking the Red Cross to voluntarily freeze the cash pending the outcome of an Australian court case brought against Sharman by several record companies. The suit alleges that Sharman "has directly and indirectly infringed on the recording companies' copyrights, violated Australian fair trade laws and conspired to harm the music industry", according to a Wired report.

Michael Speck of Australia’s Music Industry Piracy Investigations said: "We're preparing our approach to the International Red Cross. I believe this whole thing will come as a complete surprise to them, and we’re only approaching them to stop them disposing of any funds."

Speck expressed his hope that the Red Cross would co-operate, adding: "It would be incredibly disappointing if we had to sue them."

Sharman has responded by declaring that the music biz's approach is "quite simply staggering", as the company's lawyer Mary Still put it.

The ongoing Sharman v Recording Industry case has been adjourned until next March, when both sides can make final oral submissions. The outcome depends on the judge's opinion of the music industry's assertion that the "primary activity of Kazaa users is to infringe copyright" - something that Sharman allegedly does nothing to prevent.

[tekkieman]

Speck expressed his hope that the Red Cross would co-operate, adding: "It would be incredibly disappointing if we had to sue them."

Sue them for what? If someone donates money, then does something illegal, it doesn't invalidate the donation. I suppose they could try to say he is disposing of funds they would try to get in any settlement, but the RC has done nothing to be sued for.

Jeesh! Now they want blood!

[Cobra]

They disgust me.

[adam]

Speck expressed his hope that the Red Cross would co-operate, adding: "It would be incredibly disappointing if we had to sue them."

Sue them for what? If someone donates money, then does something illegal, it doesn't invalidate the donation.

Unless it wasn't their money to give. This is a trust fund. The money is invested and the proceeds are continually going to the Red Cross. Your claims are recognized at least as of the date you file suit, so say they sued Kaaza today and 3 years from now the court rules that the money invested in the trust fund was gained directly as a result of the infringement of a copyright. This ruling would apply as of the filing date, 3 years ago, but during this time the Red Cross has continued to receive money and presumably spend it. So now the recording industry can't get back this money that was illegally gained off of the copyright(s) their suit was based on. Now I know this won't break anyone's heart, but legally its unjust. So, I assume as a matter of standard procedure, they are asking the Red Cross to just not spend this money until the termination of the suit. If the Red Cross doesn't comply the Recording Industry can file suit and request a temporary injunction. Red Cross is not liable in any way to the Recording Industry, they are just ordered not to dispose of the funds until the court rules on who actually owns that money.

Here in the States this could not happen. Trusts are typically shielded from creditors unless they were created with the intent to defraud them. They could enjoin the Trustee from dispersing any funds that aren't necessary though, in which case he would probably just take out some insurance and continue operating as normal. I wonder if that is what is actually happening in this case, and the author is just paraphrasing. It'd make much more sense to go after the trustee then the beneficiary, espeically when that beneficiary is a recognizable charitable organization.

I believe that the RIAA is actually justified in most of their suits, but even I can recognize that they need to start firing more lawyers and hiring more public relations experts.

[tekkieman]

Thanks adam. I always enjoy your educated and detailed explanations. No, really! But, for the two issues you explained:

...the recording industry can't get back this money that was illegally gained off of the copyright(s) their suit was based on...

...unless they were created with the intent to defraud them...

isn't that pretty much what I said here:

I suppose they could try to say he is disposing of funds they would try to get in any settlement, ...

Of course, the difference is that you actually have some knowledge and experience, and I was talking out my butt. However, I think we said pretty much the same thing.

[adam]

I almost quoted you and responded, "exactly" before giving my spiele, but there was a distinction I was trying to make. From what you posted, it sounded like you were saying that they wanted to ensure that the defendant still had money to go after if the Plaintiff's won. Usually you can't do this. Until there is a judgment its the defendant's money.

My point is that the Plaintiff's are saying that the money is not the Defendant's at all, and we are just waiting on a court to confirm this.

Let's say we enter into a contract and you breach it. I argue that your breach entitles me to $100,000 in damages. I may or may not be able to freeze $100,000 worth of your assets in contemplation of my success at trial. But say instead that that I loaned $100,000 to you, and you deny it. Now my argument is that you just have my money, and the trial will not be deciding damages but rather who owns the money. When you are arguing over who actually owns something it is customary for the court to freeze the disposition of that asset until its ruling.

Also another distinction which isn't clear is that this money is almost certainly NOT owned by the defendant. The defendant started the trust using their money and those funds have been invested. Now the Red Cross is receiving proceeds from it; the Defendant in this suit is probably completely out of the picture.

But anyway, yeah I still think we are basically saying the same thing.

[tekkieman]

I think I understood it better the first time!

But again, thank you for keeping all the armchair lawyers armed with valid information.

[adam]

Uh oh, I'm sitting in an armchair as I type this....

[ViRaL1]

Lazy bastard!

[offline]

Of course, the difference is that you actually have some knowledge and experience, and I was talking out my butt.

Got to nominate this for " Quip Of The Year "

[tekkieman]

Of course, the difference is that you actually have some knowledge and experience, and I was talking out my butt.

Got to nominate this for " Quip Of The Year "

Sometimes, you just have to tell it like it is....