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Wednesday, April 10, 2002
Recording industry collects $1 million fine


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

Arizona-based Integrated Information Systems Inc., which ran a dedicated server permitting employees to access and distribute thousands of music files over the company network, agreed to pay the Recording Industry Association of America (RIAA) $1 million rather than face the music in court.

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

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

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

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

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

The infringing works included songs by such artists as the Police, Sarah McLachlan, A Perfect Circle, Ricky Martin, Aerosmith (news - web sites), Better than Ezra, and The Caifanes.

"We hope this discourages other companies from similar activity and serves to remind the public of their important role in helping us to combat music piracy," said Frank Creighton, RIAA's director of anti-piracy, who said the RIAA got a tip about IIS via an email.

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

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

Last week, the RIAA sued Technicolor Inc., one of the largest manufacturers and distributors of music and video programming, for allegedly producing pirated CDs of major artists.


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