February 13, 2007

Tightening The Noose [7:39 am]

The power of settlement precedent in setting the context for copyright enforcement: Universal Near Deal With Video Site on Royalties

Universal Music Group is poised to win a small battle in its war to claim royalties from sites that allow users to upload videos that contain its music.

[...] Bolt has agreed to pay a settlement valued at several million dollars, said Aaron Cohen, Bolt’s chief executive. Bolt will also agree to pay royalties in the future any time its users submit videos that contain Universal Music.

[...] To pay for the settlement, which will combine cash, stock and advertising credits, Bolt has agreed to sell itself to GoFish, a smaller rival, for as much as $30 million in GoFish stock.

“This deal is economically painful to Bolt shareholders,” Mr. Cohen said. “It is setting a precedent that companies that violate copyright at minimum risk litigation.”

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