The new legal actions are in response to a growing trend in recent years: the sale of pirated music through small, established businesses. Traditional physical goods or "commercial" piracy, which previously required large and expensive facilities to produce massive numbers of illegal tapes and CDs, now has potential to yield lucrative returns with only a minimal investment of space and capital. As a result, some retailers such as the owners of convenience stores, liquor stores or corner markets are attempting to make a quick buck by re-selling illegal CDs, or, in some cases, manufacturing counterfeit CDs themselves.
In response, the RIAA has adopted an aggressive "zero tolerance" approach to retailers engaged in this activity. In the past, retailers would often sell illicit product until they were caught, only then stopping. The objective of this program is to deter incidences of illegal music sales before it happens ? one instance of pirated music being sold and a retailer is the target of enforcement activity.
Many of the retailers identified under this program in recent months have already settled out of court, but seven of those businesses comprising retail stores in New York City and several cities in Florida, including Orlando, Jacksonville and Ocala ? refused or ignored the multiple overtures made by the RIAA to settle.
"Making a quick and illegal buck on the backs of musicians, record labels and record stores is no the way to do business," said Brad Buckles, Executive Vice President, Anti-Piracy, RIAA. ?These retailers are in effect dealing in stolen property and we intend to hold them strictly accountable."
The lawsuits filed today in federal court specifically ask for an injunction and legal damages, based on the amount of pirated product being offered.
"RIAA's efforts to stop illegal sales at retail outlets is important to all of the music retailers who operate legally, and who shouldn't have to compete with retailers who operate illegally," said Jim Donio, President of the National Association of Recording Merchandisers. "NARM does not tolerate piracy because of the harm it does to our members and the industry as a whole, and retailers who engage in these practices risk losing their membership in the Association."
The lawsuits are part of a larger RIAA initiative to address physical piracy at retail locations. The RIAA first launched the initial phase of this retailers anti-piracy program in 2002, with a wave of demands letters sent in December of that year. Subsequent lawsuits brought in 2003 against retail outlets in Texas, New York, and Florida, resulted in sizeable penalties against infringing retailers.
Buckles said that retailers had taken note of the previous legal actions and that RIAA investigators had observed fewer instances of pirated product available at retail outlets in those regions. "We are rooting out counterfeit music at countless retail outlets and want to send a strong signal to others about the consequences of this kind of illegal activity," he added.
Conservatively, the RIAA estimates that the U.S. recording industry loses more than $300 million dollars annually to physical goods piracy.