Scour Says Litigation Costs Scared Off Next Financing Round
According to Scour (http://www.scour.com), potential investors have been scared away by the potential high cost of litigation, and the company's next round of financing has fallen through. In addition, the investors were concerned that the management would be distracted by the lawsuit.
As a result, the company has laid off 52 employees, which represents the majority of its staff. The company will continue to operate with a core staff of 12, consisting of executives and a few key engineers. The Sales, Marketing, Product Development and Content departments were all dismantled.
On July 20, 2000 the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA) and the National Music Publishers Association (NMPA) sued Scour over copyright infringement. The company has filed a response to the original motion; however, both sides are currently waiting to hear from the judge regarding a potential court date.
Scour has hired a prominent legal team to defend the company. Acclaimed trial lawyer Fred Bartlit of Chicago-based Bartlit Beck Herman Palenchar & Scott, LLP, leads Scour's defense team and is accompanied by prominent Harvard Law School professor, Arthur R. Miller, and intellectual property rights author, Peter Toren.
The company said that it remains confident that the lawsuits are without merit, and hopes to retain its user base while the court battle ensues. According to a company spokesperson, it has not yet been determined if the laid off employees will be asked back in the event of a positive court outcome.