So they intelligently crawled the web for music files to download which were... not purchased.
The reason why they failed is because they, like many others, were "nebulously/quasi legal." (You know what was ALSO awesome yet not legal or respectful of creator pay? https://en.wikipedia.org/wiki/Audiogalaxy .) At least Apple was trying to make it all legit. They did start with DRM (note: no longer the case for years) but this was to make the record companies more comfortable with it.
The reason why SeeqPod was sued is because Warner Music (and others) had a case. It was not a purely frivolous, harassing lawsuit.
The reason why they failed is because they, like many others, were "nebulously/quasi legal." (You know what was ALSO awesome yet not legal or respectful of creator pay? https://en.wikipedia.org/wiki/Audiogalaxy .) At least Apple was trying to make it all legit. They did start with DRM (note: no longer the case for years) but this was to make the record companies more comfortable with it.
The reason why SeeqPod was sued is because Warner Music (and others) had a case. It was not a purely frivolous, harassing lawsuit.