- The dot-com fallout continued last week, and Scour became the latest victim.
The Los Angeles-based Internet search site for digital entertainment Thursday filed for Chapter 11 bankruptcy "to ensure its continued operation in the face of burdensome lawsuits" and to evaluate its business alliances and alternatives, Scour said in a statement.
"We took this step in order to preserve Scour's future," said Dan Rodrigues, the company's president. He said all of Scour's products, including Scour Exchange and Scour Caster, will continue to be available during the Chapter 11 process. Exchange is an online multimedia file-sharing community, and Caster is an online radio community.
Scour, which is backed by Hollywood agent Michael Ovitz, allows users to simultaneously search directories of music and movie files on users' hard drives and swap them. The service, similar to Napster, is in the midst of numerous lawsuits over copyright infringement with the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), 20th Century Fox and Metro-Goldwyn-Mayer Studios, among others.
Its biggest battle is with the MPAA and the RIAA, which filed a lawsuit in July seeking statutory damages up to US$150,000 per copyrighted work.
Jim Penhune, an analyst at The Yankee Group in Boston, said Scour's petition wasn't a surprise. "It's Napster without the audience but with Michael Ovitz," Penhune said. Scour, Napster, MP3.com and similiar sites all have the same problem, he said. "They're going out on a limb about what they can and can't do with copyrighted material," he said.
Penhune also said Scour was hurt when it laid off two-thirds of its workforce of 64 employees in September.
Scour filed its petition in the UUS Bankruptcy Court for the Central District of California in Los Angeles, which automatically stays all pending litigation against the company.