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Show TheSaltLakeTribune BUSINESS Judge Sends Message In Copyright Ruling MP3.com must pay $25,000 for every CD it copied howit lost money because of MP3.com’s infringements, even though it could have done so. He also BY LARRY NEUMEISTER ‘THE ASSOCIATED PRESS 1,493.68 ANALYSIS Tech stocks fell for a second straight session Wednesday said MP3.com had acted more responsibly than NEW YORK — A judge ruled Wednesday that MP3.com willfully violated copyrights of music companies and awarded Universal Music Group oeee), a penalty that could reach as much as US. District Judge Jed Rakoff said it was necessary to send a message to the Internet community to deter copyrightinfringement. Rakoffsaid some Internet companies “may havea misconception that, because their technology is somewhat novel, they are somehow immune the ordinary applications of laws of the United States, including copyright law.” He added,“They need to understand thatthe law's domain knowsnosuchlimits.” MP3.com’s lawyer, Michael Rhodes,told thejudge a day earlier that a penalty ofany more than $500 per CD was virtual “death sentence”for the company. Outside court, Rhodes did not reject his earlier prognosis. Utah Man Pleads Guilty In Investment Scam More than $5.8 million is being returned to investors bilked in an illegal pyramid scheme. The schemecaused losses ofat least $8.3 millionto 8,000 residents of Missouri, Arkansas and Oklahoma tween 1995 and 1996,said Steve Hill, the U.S. attorney for the Western District of Missouri. “Just do the math,”he said. MP3.com Chief Executive Officer Michael Robertson promised to appeal. Rakoff said he could have given an award of as muchas $150,000 per CD but chose a numberconsiderably lower because Universal had not specified other Internetstart-ups. But experts were surprised at the severity of the ruling. “Theruling was much harsher than 1 anticipated, as it puts the companyliterally on the brink,” said Nitsan Hargil, an analyst at Kaufman Brothers in New York. “If we assume the higher sum of money here,it would put MP3.com out of business. It’s very un- likely that they wouldreceivefinancing to pay these damages,” Hargil said. “In the more likely eventthat they could work out a paymentscheme, they could survive anotherday,butit doesstill leave them with somevery serious problems.” Leonard Rubin, a Chicago attorney who specializes in copyright, trademark and entertainment law, said the decision was nota surprise given thejudge’s previousrulings. “ButI would not have expected the severity ofthe award.It’s very heavy,” hesaid. “The judge is really trying to say, ‘Listen all you MP3 typ°sout there on the Internet, you better make your hay because the sun is setting. The courts are not going to tolerate this kind ofwholesale copyingofprotected works.’” ~ Associated Press file photo MP3.com CEO Michael Robertson promised Wednesday to appeal a judge's ruling that could effectively bankrupt his company. See MP3.COM,Page B-5 Lawmakers Six Years of Turmoil in Provo Price per share of Novell stock has fluctuated throughout the company’s troubled history. SkewerTire, ROBERT J. FRANKENBURG Seven men,including one from Salt Ford Execs LakeCity, have pleaded guilty and been given sentences ranging from probation and home detention to a year ofpi ison. Their now-defunct investment firm — Global Concepts, A ure Chest,Inc., of Nevada — was ordered toforfeit its assets. According to Hill, Global Concepts initially recruited investors by holding rallies and town meetings around the country. Investors were required topay a $400 membershipfee and a minimum investmentof$1,000. In or- Documents show problems may have been found in 92 SEE ee Novell announces to sell WordPerfect to a ‘THE ASSOCIATED PRESS ea Corel Corp., a der to maketheir business looklegiti- mate, the defendants returned someof the invested funds to the original investors. OnFeb.26, 1998, a federal grand jury in Springfield, Mo., returned a 10count indictment charging seven men andthe corporation with scheming to solicit funds. The defendants are: John Jackman, 56, of Salt Lake City; Ronald Stahlhut, 65, of Houston; Hans Tschebaum, 56, of Burbank,Calif.; Gregory Goulas, 49, of Houston; Carl Carter, 60, of Maryland Heights, Mo.; Steve Conzalez,36, of Castiac, Calif.; and Joseph Heller, 57, of Huntington Beach,Calif. Canadian software firm, O Ny AUGUST 1996 aNovell loses ‘money and itsstock around $10, less PTEMBER 2000 a 5 AEE Novell, coming off anotherlosing quarter, lays off 18 percent ofits 5,800memberworldwide workforce, or about 1,000 workers. 1997 Bank of Utah Buys Lender ‘Rhonda Halles Maylett / The Salt Lake Tribune Bank of Utah, an Ogden-based bank with assets of$390 million, has ac- Tight Labor Market Welcomes Novell Layoffs quired Cache Mortgage of Logan. The mortgage company operates four branches in Salt Lake City, Orem, Logan and Brigham City and originates $150 million in mortgages annually. The acquisition will double Bank ofUtah’s mortgage lendingvolume. Cache Mortgage will operate as a division of the bank. The mortgage company’s president, Bruce Sorensen, will serve as vice president and reee ore en juired offices. Bank of Utah operates 14 branches in Weber, Davis and Salt Lake counThe value of the acquisition was not disclosed. NPS to Sell 3M Shares NPS Pharmaceuticals Inc., a Salt Lake City drug-research company,announced Wednesdaythatit plans to sell 3 million ae of commonstock in asecondary offering. CIBC World jorld Markets Corp., New voted will be the lead manager for the and Prudential Vector Heettiocare Group,oe id of Prudenthal Securities, will co-manager. Te company diosa na fling with theSecurities and Exchange Local companiesin desperate need oftech talent should snatch up people wholost jobs BY LESLEY MITCHELL THE SALT LAKE TRIBUNE Novell Inc.'s announcement Wednesday that it will lay off as many as 450 workers in Utah is not all bad newsin a state where hundreds of fast-growing technology companies compete with the software giant for employees. “These layoffs are very difficult froma personal standpoint but every one ofthose people should have an opportunity to find anotherjob in Utah,” said Richard Nelson of the Utah Information Technologies Association. In fact, many Novell workers in Provo probably will not have to move outside Utah County to find work, said Richard Bradford, chief executive of the Utah Valley Economic DevelopmentAssociation. Bradford estimated 460 computer software companies in Utah County collectively employ 16,700 people. Many are looking year-round for new employees. “We've been adding about 2,000 new high-tech jobs a year,” Bradford said. Many Novell employees traditionally havebeen reluctantto leave the company because it often pays highersalaries, has better benefits and offers more stability than smaller software companies. Butover the past several weeks, companies such as software provider MyComputer.com in Orem have received numerous inquiries from Novell employees. MyComputer.com,which employs 135 people, up from 70 six months ago,said it has received two-dozen résumés from Novell workers in the past week, including five on Wednesday. Some résumés are from workers who are losing jobs, while others are from employees, including several software engineers, who no longer wantthe pres- sure of working environment. in an uncertain “Software engineers are a hot com- modity right now,so this will play to our advantage,” said Jolene Day, human resources director. Jeff Weber, human resources director at MyFamily.com Inc. in Provo, said the layoffs probablywill help the company fill several positions, too. “We are always looking for software developers, Web designers and technical talent in general,” he said of the company, which operates four family history-related Websites and has doubled its employmentover the past year to 300 people. WASHINGTON — The CEO of Bridgestone/Firestone Inc. apologized Wednesday to angry members of Congress for dozens of fatal occiientsti that maybe linked to his company’stires. The chief executiveof Ford Motor Co. insisted his company could not be blamed. At the same time, internal peetreeee documents obed by The Associated Press showed the company may have had data indicating safety problems years before the Aug. 9 recall of 6.5 million tires. Rep. Billy Tauzin, R-La., said he believed the data was available as early as 1992. “Where was your sense of concern, asa human being anda corporation,to yell: ‘Look out, America! Danger is coming!’” demanded Sen. Barbara Mikulski, D-Md. At separate House and Senate lawmakers admonished the tire maker and Ford, which uses Firestone tires on its popular and other models, for not notifying the public there was a problem even jough complaints aboutthe tires had Beste Bee Ona oe eee a recall ofthetires in 16 feincountries more than a year before the U.S. recall, but was not required by law to notify federal officials anddidnotdo so. The National Highway Traffic Safety Administration (NHTSA) has received more than 1,400 complaints, including reports of 88 deaths and at least 250 injuries that maybe linked to the pee tone tires. “I come before you to coe to you, the American people and cially to the families who aveboat lost Bradford said he finds it ironic that the struggles experienced by Novell, which has had such a profound effect ing See LAYOFFS, Page B-5 Citigroup Buys Global Lending Powerhouse in $29.5 Billion Stock Deal BY DUNSTAN PRIAL ‘THE ASSOCIATED PRESS NEW YORK — Financial services giant Citigroup Inc. is buying lending powerhouse Associates First Capital Corp. for $29.5 billion in stock, seeking to stabilize deal announced Wednesday will business, whichrise and fall based on the moods ofthe U.S. stock and bond markets, As the owner ofCitibank, Citigroupis the biggest bank holding companyin the United States andis a leaderin insurance and brokerage services through its Travelers and Salomon Smith Barney operations. Associates First Capital is a market leader in each of its business lines, including issuing credit cards, providing home equity and mortgage loans and leasing trucks and heavy equipment. The deal has been approved unanimously by the boards of both companies and is expected to close by the end of the year, pending regulatory and shareholder a “The jewel ofAssociates First Capital's global operations is its Japanese business, iu gives Citigroup a platform in that ery atttactive consumer finance market.” said Joel rerrsaeatenaee at William Blair & nkexpectations that consolidation within in Chicago, The (wri conguninn hase Brae ave lap in their consumer finance units, Go- acquisition should result in savings of $600 million in the first two years, and should add 10cents See ceeen Eee executives sg hewalli a strongrally in a Vccnbage alaecteh aa per share, luing the deal at $42.49 Sars of Cligroup fl on, the news, py $2 the however,ppg 2 0Go he Siang ae Re nounced value of $31.1 Associates First rose $10.63 to |
