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Recording industry collects $1 million fine

April 10, 2002
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LOS ANGELES, April 9 (Reuters) -

Big Brother islistening!

That's the message the recording industry hoped to send onTuesday by announcing it had collected $1 million from a companythat let employees swap songs on an internal server.

Arizona-based Integrated Information Systems Inc., which ran adedicated server permitting employees to access and distributethousands of music files over the company network, agreed to paythe Recording Industry Association of America (RIAA) $1 millionrather than face the music in court.

The trade group, which represents the major music companies likeAOL Time Warner Inc.'s Warner Music,Bertelsmann AG's BMG, Sony Corp.'s Sony Music, Vivendi Universal and EMI Group Plc has beenon a legal crusade to stamp out online copyright infringement sincesuccessfully hobbling Napster, the original song-swapping service,with a preliminary injunction last year.

"This sends a clear message that there are consequences ifcompanies allow their resources to further copyright infringement,"said Matt Oppenheim, RIAA Senior Vice President, Business and LegalAffairs.

"We applaud IIS for accepting its responsibility and workingactively with us to settle this case out of court."

IIS is an Arizona-based company offering various technology andbusiness consulting services. One of the products offered by IIS,ironically, included software that provided secure distribution ofcopyrighted digital material.

In mid-2001, RIAA became aware of IIS's company server dedicatedsolely to allowing employees to post and share thousands ofcopyrighted MP3 files, which are digitally compressed music files,at work.

The infringing works included songs by such artists as thePolice, Sarah McLachlan, A Perfect Circle, Ricky Martin, Aerosmith,Better than Ezra, and The Caifanes.

"We hope this discourages other companies from similar activityand serves to remind the public of their important role in helpingus to combat music piracy," said Frank Creighton, RIAA's directorof anti-piracy, who said the RIAA got a tip about IIS via anemail.

In August 2001, the RIAA asked IIS to stop the practice and thetwo parties entered talks for a settlement.

The RIAA on Tuesday also said it reached a $3.2 millionsettlement from CD manufacturing company DOCdata USA to resolveclaims the company had pressed dozens of infringing CDs, includingalbums by Santana, Toni Braxton and Destiny's Child.

Last week, the RIAA sued Technicolor Inc., one of the largestmanufacturers and distributors of music and video programming, forallegedly producing pirated CDs of major artists.

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