EMI Sues Bertelsmann Over Financial Backing of Napster

British music giant EMI Group sued rival Bertelsmann on Wednesday, becoming the second major record label to accuse the media powerhouse of contributing to massive online copyright infringement by backing Napster Inc.

The suit filed in New York federal court alleges that the German conglomerate committed vicarious infringement by financing the online file-sharing network from October 2000 until it shut down the following July.

EMI said Bertelsmann, which owns record label BMG, was “fully aware” that the $85 million in loans it provided to the fledgling Napster service paid for operating expenses, keeping the company alive for months as millions of songs were traded illegally.

The move follows a similar lawsuit filed against Bertelsmann by Vivendi Universal’s music unit last month, and a separate case filed by songwriters and music publishers.

EMI, which was set to merge with BMG two years ago, is seeking at least $150,000 for each of the songs traded during Bertelsmann’s involvement, an amount that probably reaches into hundreds of millions of dollars.

“We believe we have a strong case and we will of course ensure that our artists benefit from what we believe will be a successful outcome to this litigation,” EMI said in a statement. “Bertelsmann enabled and encouraged the wholesale theft of copyrighted music.”

A Bertelsmann spokeswoman had no comment.