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RIAA sends stern legal letter to controversial music NFTs site HitPiece
By Chris Cooke | Published on Monday 7 February 2022
The Recording Industry Association Of America has sent a legal letter to lawyers representing HitPiece, the music NFTs website that became a major talking point in the music community last week for all the wrong reasons. The trade group’s letter was both a cease-and-desist on behalf its members and a demand for information about all of the outfit’s activities and revenues to date.
The HitPiece site was promoting for sale non-fungible tokens linked to a plethora of artists and songs. The NFTs were not actually linked to any music files, but were seemingly connected to the artwork that accompanied each featured track. That artwork appeared on the site having been pulled out of Spotify. Artwork, of course, is also protected by copyright, and for signed artists that copyright will usually be owned or controlled by a label.
Using that artwork, therefore, would require permission from the copyright owners, ie the labels, and no such permission was sought. Artists could also argue that their trademarks and their publicity rights had been infringed by the NFTs site, because HitPiece was implying that the tokens it was selling were somehow approved or endorsed by the artist behind each song.
As the music community became aware of HitPiece last week – and talk of litigation from labels and artists started to proliferate on the social networks – the NFTs site went offline, replaced with the line “we started the conversation and we’re listening”.
But that doesn’t mean that HitPiece, and its founders Rory Felton and Michael Berrin, can’t necessarily be held liable for the copyright infringement that had already occurred on their website, especially in the US where copyright owners can sue for so called statutory damages, rather than damages actually linked to any monies lost or gained as a result of the infringing activity. With that in mind, the RIAA wants to ensure that all information about HitPiece’s activities to date is stored.
In its letter to HitPiece’s lawyer, the RIAA said: “As you are no doubt aware, your clients, through the HitPiece website, have been engaged in the systematic and flagrant infringement of the intellectual property rights of the record companies and their recording artists on a massive scale”.
“Using artist and track names, copyrighted album art, and other protected images – all without the permission of the rights owners – your clients have offered at auction and sold NFTs promising ownership in a ‘unique song recording’ and the ability ‘to create a digital display of album artwork associated with their favourite music, with a one-of-a-kind, non-fungible token of the artwork’”.
“Many of these ‘unique song recordings’ and associated artwork”, it added, “are those owned or exclusively controlled by the record companies”.
Noting that the HitPiece website was taken down last week, the letter went on: “This does not absolve them of liability for their prior conduct”.
“Accordingly”, it said, “we demand that your clients immediately: (1) cease and desist from any further infringement of the rights of the record companies and their recording artists; (2) keep the HitPiece website offline and inaccessible to the public; (3) provide us with an accounting of all revenue; and (4) provide us with a complete list of every NFT, along with all artwork and text associated with each NFT, that was ever offered for auction on the HitPiece website”.
“Your clients are liable to the record companies and their artists for damages under each of the legal claims identified above, among others”, the letter added. “Please contact me as soon as possible to confirm that your clients will comply with these demands and to discuss an appropriate resolution. In the meantime, I trust that your clients appreciate their legal obligation to preserve all documents and other evidence that is in any way related to this matter”.
It seems likely that buyers of a HitPiece NFT wouldn’t actually get any rights in relation to the artwork linked to the token, even if that artwork had been properly licensed from an artist or label.
Instead, the buyer would basically get the warm glow of being officially linked to a song within the HitPiece community – with that link recorded on the blockchain – meaning they are ultimately buying bragging rights. Which might seem like a disappointing thing to own, although that’s what lots of music NFT drops are ultimately selling.
That said, that fact has led to additional criticism of HitPiece, to the effect that the website’s official sales pitch implied that buyers were buying something much more significant than a warm glow – and, indeed, that the NFT would be connected to an actual track not just a JPEG of some artwork.
Elsewhere in its letter, the RIAA noted HitPiece’s insistence that it was never selling access to or rights in any actual music, and then contrasted that with what the HitPiece website was telling buyers, musing that that official sales pitch “likely amounts to yet another form of fraud”.
The RIAA says that it sent the legal letter partly to stop HitPiece itself from infringing the rights of labels and artists, but also as a warning to any other NFT start-up thinking of selling tokens somehow connected to the music industry’s songs, recordings, artwork or artist brands without first getting all the required permissions from labels, artists and other rights owners.
RIAA’s COO Mitch Glazier states: “As music lovers and artists embrace new technologies like NFTs, there’s always someone looking to exploit their excitement and energy. Given how fans were misled and defrauded by these unauthorised NFTs and the massive risk to both fans and artists posed by HitPiece and potential copycats, it was clear we had to move immediately and urgently to stand up for fairness and honesty in the market”.
Meanwhile, the trade group’s Chief Legal Officer Ken Doroshow adds: “HitPiece appears to be little more than a scam operation designed to trade on fans’ love of music and desire to connect more closely with artists, using buzzwords and jargon to gloss over their complete failure to obtain necessary rights”.
“Fans were led to believe they were purchasing an NFT genuinely associated with an artist and their work when that was not at all the case”, he goes on. “While the operators appear to have taken the main HitPiece site offline for now, this move was necessary to ensure a fair accounting for the harm HitPiece and its operators have already done and to ensure that this site or copycats don’t simply resume their scams under another name”.
This week’s Setlist podcast puts the spotlight on the HitPiece furore – you can tune in here.
