RIAA Targets File-Sharing in the Workplace

Just weeks after training its anti-piracy guns on universities nationwide, the Recording Industry
Association of America’s (RIAA) war against the file-sharing networks has spread to Fortune 500

Attorneys for the RIAA have sent a letter to about 300 U.S. companies, warning they could face
“significant legal damages” because their networks were being used to “illegally distribute
copyrighted music on the Internet.”

The letter was sent out along with a
complete package detailing specific alleged piracy activities. Part of the detailed packet sent to
specific companies includes the computer location of the offending material with its Internet
Protocol (IP) address and a list of the works illegally offered.

A spokesperson for the RIAA declined to identify the companies that received the
unprecedented warning. Approximately 20 percent of the companies were in in the
medical-related field, 20 percent in manufacturing and 35 percent to technology firms. The rest
went to corporations in a variety of unrelated sectors.

In the letter, signed by RIAA president Cary Sherman, the RIAA said investigations found that
IP addresses assigned to the targeted companies were used to log onto the FastTrack network
(the online peer-to-peer network that hosts KaZaA, Grokster and iMesh) to offer up copyrighted
sound recordings for others to download for free.

“Obviously, such infringing conduct must stop. These acts of infringement could expose your
employees and your company to significant legal damages. Indeed, federal copyright law
imposes stiff penalties for acts of infringement,” Sherman warned. The RIAA VP said copyright
owners can collect statutory damages of up to $150,000 per copyrighted work infringed as well
as legal costs and attorneys’ fees, making it clear damages can also include all of the profits
earned by an infringer plus the actual damages suffered by the copyright owner.

“In addition, infringers risk relinquishment of any equipment used in manufacturing the
infringing copies. The consequences for not taking action, therefore, can be quite serious,” he

It is not the first time the RIAA has targeted network administrators to help with the battle
against illegal file-sharing. In January, the association sent a letter to college administrators
seeking the co-operation of sysadmins to eliminate the peer-to-peer networks from campuses.

The latest tactic to put the onus on the network admins has been roundly criticized in some
quarters for forcing the grunt work of policing against copyright infringement on the private

Despite those criticisms, the RIAA is pressing ahead and sources say the internal investigations
could lead to more letters and warning being dispatched in coming weeks. The association has
also enclosed sample user logs showing lists of infringing music files made available on
FastTrack by specific employees. “We also attach a CD-ROM containing the entire log of files
offered by that employee. Note that this information reflects information we found based on a
very limited search and could well indicate that this activity is widespread on your network,”
Sherman noted.

He told the companies that the problem of online copyright infringement in the workplace
extends beyond legal liability. “As we highlighted in a recent letter and corporate policy guide to
the CEOs of the Fortune 1000, the dangers of permitting music piracy in the corporate
environment can also include security risks to the network,” he said.

The association cautioned that the disclosure of sensitive corporate information to third parties,
importation of viruses, increased bandwidth costs, slowed Internet connections are all harmful
side effects of allowing file-sharing at workplaces.

“We encourage you to adopt and fully implement employee policies and technical measures
that prevent copyright infringement on your corporate network, as we will continue to monitor for
infringing conduct and take any appropriate legal action necessary to protect our rights.”

The RIAA claims an estimated 2.6 billion illegal downloads of copyrighted works occur each
month, some at workplaces in the U.S. “Because of high-speed connections and huge
bandwidth, corporate computer networks are tempting and fertile ground for employees who
illegally trade music using an unauthorized peer-to-peer network,” the trade group said.