RECORD INDUSTRY PROTECTS COPYRIGHTED SOUND RECORDINGS ON THE INTERNET
Enforcement Campaign Expands
Music Archive Sites Targeted

WASHINGTON, June 9, 1997 --The Recording Industry Association of America has filed separate civil actions seeking temporary restraining orders and preliminary injunctions against three Internet Music Archive Sites. These sites allow users to download and, in some cases, upload full-length songs without permission of the copyright holder. Speaking for its record company members, the trade group charges that these sites are violating federal copyright laws through the unauthorized reproduction and distribution of copyrighted sound recordings.

The suits, which were filed in those Districts where the computer server is located, are directed at the sites, and the operators of the sites, who are unknown at the time of the filing.

Using their Internet sites, the defendants have illegally copied, and encouraged countless others to copy, hundreds of different copyrighted sound recordings. Through express onscreen invitations (such as "Leach what you want. I don't care. Just be nice and try to upload something."), as well as their careful organization of the infringing material into easily accessible lists, the defendants actively encourage Internet users visiting the sites to download the music to their own computers. Some of the defendants also encourage others to contribute additional infringing works to their inventory.

The infringing copies can then be played through a computer's speakers, with near CD-quality sound, by anyone who downloads them. Given the speed and ease of widely-transmitting information on the Internet, the potential harm to copyright owners is exponentially greater than traditional acts of piracy. For the past 18 months, the RIAA has been contacting Internet sites and informing them of how copyright laws may apply. As part of a broader education campaign, the RIAA is specifically addressing the growing problem of Music Archive Sites on university servers by implementing a college Internet Copyright Campaign to inform students and administrators about the legal implications of copyright infringement.

QUOTES: Hilary Rosen, RIAA President "Most Americans believe it's wrong to steal someone else's work. As we embrace today's newest technology -- the Internet -- it's important to remember our values count, even in cyberspace. The RIAA is working to protect the intellectual property of its members. We want to stem the tide of what many people believe to be a harmless practice, but we know will have significant commercial consequences.

"Bottom line, whatever your view of music on the Net, it is the prerogative of the artist and record company to make the decision how it will be used."

Steven D'Onofrio, RIAA Executive Vice President and Director of Anti-Piracy "These music archive sites are a blatant infringement of copyright law. Without the law to protect and stimulate creativity, the Internet will never truly see its full potential."

CONTACTS: Alexandra Walsh,or Lydia Pelliccia 202.775.0101
awalsh@riaa.com or lpelliccia@riaa.com

NOTES: Plaintiffs in the complaint are A&M Records, Inc., Arista Records, Inc., Atlantic Recording Corporation, Capitol Records, Inc., Geffen Records, Inc., Island Records, Inc., London Records, Maverick Recording Company, MCA Records, Inc., PolyGram Records, Inc., Sony Music Entertainment Inc., Universal Music Group, and Warner Bros. Records, Inc.

The three lawsuits will be filed on Monday, June 9, 1997, in United States Federal District Courts. Following are the three URL addresses for the sites mentioned in this release:

ftp://208.197.0.28
ftp://parsoft.com/MP3s
http://www.avalon.simplenet.com/coolmp3/music.htm

MUSIC ARCHIVE SITE QUESTIONS AND ANSWERS

1. Q. What are Music Archive Sites on the Internet?
A. These sites host an inventory of full-length sound recordings for Internet users to download and play and in some cases upload as well. Music Archive Sites may contain hundreds of full-length sound recordings that, for the most part, are of near CD quality. The sites often actively encourage -- sometimes require -- users to upload additional full-length sound recordings to the site in exchange for being able to download. Generally, the longer a site is in existence, the larger its inventory of sound recordings.

2. Q. What are these sites doing wrong?
A. Virtually all of the music found on Music Archive Sites consists of copyrighted sound recordings taken from commercial sources (such as CDs). Music Archive Sites that do not obtain licenses from the sound recording copyright owner (usually the record company) are violating federal and/or state copyright laws, and may be committing a criminal violation. Specifically, among the rights granted to sound recording copyright owners under federal copyright laws is the right to control both the reproduction and the distribution of their works. These rights are fundamental to the protection of intellectual property, and are blatantly violated by these Music Archive Sites.

3. Q. What are the penalties for copyright infringement?
A. Under federal copyright law, the civil penalties for copyright infringement can be severe, including substantial monetary damages, injunctive relief, and liability for attorneys' fees incurred in prosecuting a case. If a court determines that the infringement was committed willfully, statutory damages of up to $100,000 for each sound recording infringed can be awarded. Even if not found to be acting willfully, a defendant can still be held liable for statutory damages of $500 to $20,000 for each sound recording copyright infringed. It is important to remember that these penalties apply even if money was not charged. In addition, criminal penalties may be imposed if someone wilfully infringes a copyrighted work for commercial advantage or private financial gain. This crime is punishable by up to five years imprisonment, up to $250,000 in fines, or both. State civil damages and criminal penalties vary from state to state.

4. Q. How pervasive are Music Archive Sites?
A. These sites are a pervasive and growing problem. There are hundreds of sites worldwide. As technologies have advanced allowing for better sound quality and faster downloading, so has the popularity of Music Archive Sites. The first generation of these sites required a higher level of Internet experience, both in terms of locating the sites and using them. Today, Music Archive Sites are being created on the World Wide Web, the most user-friendly part of the Internet. As a result, they are now readily accessible and available to every type of user, even those with limited Internet skills. It's now also popular for Music Archive Sites to "link" to other Music Archive Sites so that, with a few mouse clicks, a user may have easy access to thousands of other pirated sound recordings.

5. Q. What technologies have facilitated the spread of Music Archive Sites?
A. The sound quality made possible by advances in a number of technologies over the past year has caused an explosion in the volume and popularity of Music Archive Sites. This includes advances in compression technologies, PC hardware and software, bundling PC software operating systems and audio editing software, as well as greater bandwidths, simplified web building software, and cheaper storage and Internet access.

6. Q. How long does it to take to download a song using these technologies?
A. A song can be downloaded in virtually real time.

7. Q. Why were the complaints filed?
A. These complaints were filed because the RIAA's investigations of Music Archive Sites determined that a growing industry of pirated sound recordings is emerging on the Internet. Recordings, which otherwise are available for purchase through legitimate channels, are being pirated on the Internet. Through the complaints, the RIAA is seeking an injunction against the illegal activity of uploading copyrighted sound recordings to Music Archive Sites without permission of the copyright holder because of the serious harm it threatens, and is seeking damages for the infringements which have already occurred.

8. Q. How did you find these Music Archive Sites?
A. Our investigators constantly surf the Internet for infringements of our member companies' sound recordings. We also receive leads from artists, managers and labels. In general, Music Archive Sites can be located by using standard Internet search engines.

9. Q. Have you found Music Archive Sites on college or university computers?
A. Yes. In fact, we have found an alarming number of large Music Archive Sites on university computer servers. This is a product of computer-savvy students having access to their university s computer network, which in many cases has both high speed communication lines and very large file servers for storage. At some major universities, we have found several different sites on one campus.

10. Q. Why haven t you sued the universities or their students?
A. It is important to emphasize that the Music Archive Sites found on university computer servers are just as infringing, and cause just as much harm, as the sites against which we have filed litigation. The RIAA is specifically addressing the growing problem of Music Archive Sites on university and college campuses by implementing a college Internet Copyright Campaign to educate students and university administrators about the legal implications of copyright infringement.

11. Q. Who gets hurt by this sort of infringement?
A. Recording artists, producers, composers, publishers, musicians and vocalists who helped make the recordings -- everyone in the music community whose livelihood depends on sales royalties. Record companies and record retailers are also hurt by piracy. In today's marketplace, 85% of the records released do not recover production costs. Record companies rely on income from the 15% of the recordings that are successful (the bulk of titles available for copying on these sites ) to develop new performers and composers and subsidize less profitable types of music. These sites also hinder the emergence of a legitimate online retail market -- it's the equivalent of someone standing outside a record store giving away for free the same CDs being sold inside.

12. Q. Why is the RIAA involved?
A. The RIAA represents the record companies that create, manufacture and distribute more than 90 percent of the legitimate sound recordings sold in the United States. One of the RIAA's primary missions is to protect the intellectual property of its members.

13. Q. What is your next step? Will the RIAA pursue more Music Archive Sites?
A. The RIAA intends to continue its education efforts and, monitor the Internet. We hope that litigation sends the appropriate message. But if these sites continue to proliferate on the Internet, the RIAA will continue this strategy to protect its members' rights.

14. Q. What resources is the RIAA directing towards controlling online piracy?
A. The RIAA is continuing to reengineer its staff, resources and programs to deal with the digital and online environment by employing technology, education, enforcement, and when necessary, establishing critical legal precedents before the technologies advance to the point where large-scale online piracy becomes commonplace. RIAA staffing in this area draws on its lawyers, investigators, engineers and public relations department.

15. Q. Are there other types of infringing activity on the Internet that the RIAA is targeting?
A. The association monitors the Internet daily, scans for sites that contain music, and addresses infringements of our member companies' rights. In addition to Music Archive Sites, the RIAA is focussing its activities on sites offering unauthorized interactive distributions and performances of copyrighted sound recordings, Internet radio sites, bootleg marketplaces, and other developing areas of concern. We are also dealing with software companies that enable and facilitate copyright infringements in this area including browser software and streaming audio companies.

COPYRIGHT LAW FACT SHEET

Sound recordings, and the creators and/or owners of these works, are protected under federal or state law from a variety of activity, including unauthorized uses that occur in the Internet environment. Under federal copyright law, an owner of a sound recording copyright has the exclusive right to reproduce, distribute, and adapt that sound recording. Therefore the following acts, if not authorized by the owner of the sound recording, may violate its rights under federal law:

1. Making a copy of all or a portion of a sound recording onto a computer hard drive, server, or other hardware used in connection with a web site or other online forum; and/or
2. Transmitting a copy or permitting users to download sound recordings from the site or other forum.

Similar rights are granted in many states as well. Music Archive Sites typically violate both of these rights by copying sound recordings to a server and permitting users to download sound recordings from the Music Archive Site to the user's own personal computer.

In addition, the owner of a sound recording also has the right to control various digital public performances of the recording. This right became effective in February 1996 under the Digital Performance Right in Sound Recordings Act. This new law provides sound recording owners with protection against unauthorized digital transmissions as it applies to:

1. Interactive services, which are digital audio transmission services that allow a user to request and receive a transmission of a particular sound recording; and
2. Subscription services, which are non-interactive services for which the user pays a fee for the transmission or access.

This law also governs the re-transmission of radio station broadcasts over the Internet and many other digital retransmissions of copyrighted sound recordings.

Some Music Archive Sites have an interactive component to them and allow users to request and instantaneously receive digital transmissions of sound recordings. If not authorized by the sound recording copyright owners whose works they utilize, these sites would be in violation of a sound recording owner s digital public performance right.

The federal copyright law provides for various civil remedies, including substantial monetary damages, injunctive relief, and liability for attorneys' fees incurred in prosecuting an action. In addition, criminal penalties may be imposed if someone wilfully infringes a copyrighted work for commercial advantage or private financial gain. This crime is punishable by up to five years imprisonment, up to $250,000 in fines, or both. State civil and criminal penalties vary from state to state.