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

"Your clients' outright theft of these valuable intellectual property rights is as outrageous as it is brazen."

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 and threatening litigation. The letter was first shared with Billboard.

The warning came after 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.

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“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.”

Even though the site was taken down on Feb. 2, the RIAA comments that the move would not “absolve” the company and that HitPiece is “liable to the record companies and their artists for damages” for the time that it was live. The letter also demanded that the site save emails, texts and other records in case of future litigation.

“As music lovers and artists embrace new technologies like NFTs, there’s always someone looking to exploit their excitement and energy,” said Mitch GlazierRIAA chairman and chief executive 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.”