RIAA Threatens Lawsuit Against NFT Platform HitPiece Over ‘Flagrant’ IP Violations

The RIAA sent out a demand letter Friday (Feb. 4) to NFT platform HitPiece on behalf of the major labels, alleging the infringement of their intellectual property rights. The letter was first shared with Billboard. HitPiece made news this week when a beta launch of the platform sparked outrange among the music industry for listing thousands of NFTs for auction representing artists’ songs that were created by pulling artwork and other information off Spotify.

“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,” wrote RIAA senior vp litigation Jared Freedman in a letter to Hitpiece’s attorney Douglas Mark, of Mark Music and Media Law.

Founded by serial entrepreneur Rory Felton and investor Jeff Burningham, Hitpiece’s intent was to create NFTs of “every song,” according to the company’s pitch deck. Using Spotify’s API to gather information on artists of all sizes – from developing acts to Beatles members – HitPiece uploaded listings of NFTs from musicians it had never spoken to or partnered with, stating these non-fungible tokens were “available for auction” or “live” auctions. According to HitPiece’s FAQ section, the NFTs were said to operate on HitChain, a private Ethereum side chain which does not provide proof of work.

Though HitPiece marketed their NFTs as allowing fans to own “unique song recordings,” it did not appear it was actually auctioning songs or recordings of music — simply the associated cover art. The RIAA letter addresses this claim, stating “if true, [this] likely amounts to yet another form of fraud.”

A representative from HitPiece spoke exclusively to Billboard on Feb. 2, saying the company “never used or sold any copyright music without permission and [HitPiece] will not do so. Any stories to the contrary are false.” The representative was also “unable to answer” when asked if HitPiece had consulted a lawyer prior to the launch of the HitPiece beta site.

RIAA’s letter continues, saying that many of the sound recordings and “associated artwork” are “owned or exclusively controlled by the Record Companies” that the association represents and by using the names and images of their signed recording artists, HitPiece is participating in “outright theft” that “is as outrageous as it is brazen.”

“As music lovers and artists embrace new technologies like NFTs, there’s always someone looking to exploit their excitement and energy,” said Mitch Glazier, RIAA chairman and chief operating officer, in a statement. “Given how fans were misled and defrauded by these unauthorized 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.”

RIAA’s Chief Legal Officer Ken Doroshow added, “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. 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.”

Read the full letter below:

Dear Mr. Mark

I write on behalf of the Recording Industry Association of America’s (“RIAA”) member companies UMG Recordings, Inc., Sony Music Entertainment and Warner Music Group Corp., including their affiliated subsidiaries and record labels (the “Record Companies”). The Record Companies create, manufacture, and/or distribute sound recordings representing the majority of all legitimate recorded music consumption in the United States, including many of the most popular and commercially valuable sound recordings in the world.

I understand that you represent the NFT auction website Hitpiece.com (“Hitpiece”) and its founders, including Rory Felton, Michael Berrin, and possibly others. 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 favorite music, with a one-of-a-kind, non-fungible token (“NFT”) of the artwork.” Many of these “unique song recordings” and associated artwork are those owned or exclusively controlled by the Record Companies.

Your clients’ operations have been variously described in recent days as a “scam,”1 a “complete sham,”2 “immoral,”3 “unethical,”4 and a “fraud.”5 All of these criticisms are of course accurate. Although it appears that your clients now contend that they did not actually include any sound recordings with their NFTs (which, if true, likely amounts to yet another form of fraud), it is undeniable that, to promote and sell their NFTs, your clients used the names and images of the Record Companies’ recording artists, along with copyrighted album art and other protected images, the rights to which belong to the Record Companies and their artists. Your clients’ outright theft of these valuable intellectual property rights is as outrageous as it is brazen. It is also actionable as copyright infringement (17 U.S.C. § 101, et seq.), trademark infringement (15 U.S.C. § 1114), federal unfair competition and false representation of affiliation (15 U.S.C. § 1125(a)), violations of state and common law rights of publicity, and unfair competition under applicable state law (including, e.g., Cal. Bus. & Prof. Code § 17200).

We are aware that your clients have recently taken down the Hitpiece.com website, although it appears that they may have launched a new and as yet content-free website at GetHitPiece.com. Regardless, this does not absolve them of liability for their prior conduct. Accordingly, 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, whether through the Hitpiece.com or GetHitPiece.com websites or by any other means, (2) keep the Hitpiece.com website offline and inaccessible to the public, (3) provide us with an accounting of all revenue derived from Hitpiece.com, 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.com website.

Your clients are liable to the Record Companies and their artists for damages under each of the legal claims identified above, among others. 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, including a complete copy of the Hitpiece.com website itself, as well as any and all physical and electronic documents (including, without limitation, emails, texts, chats, and social media pages).

The foregoing is not intended to be a complete recitation of the facts pertaining to your clients’ violation of the intellectual property and other rights of the Record Companies or their artists. Nothing herein shall be deemed an admission or waiver of any rights or remedies of the RIAA, the Record Companies, or their recording artists, all of which are hereby expressly reserved.

I look forward to hearing from you.

Sincerely,

Jared Freedman

Senior Vice President, Litigation Recording Industry Association of America