Cosynd’s Statement on NFT Thieves and Action Plan for Copyright Protection

TL;DR HitPiece, don’t f*ck with creators.

As a company that has always advocated for the protection of all creators and their work, we couldn’t be more appalled at the utter disregard and negligence of HitPiece Music.

While we watch this all unfold, we implore this community to be conscious of the rights of creators and to create opportunities to support them, rather than to exploit them.

(Updated) Read below for a quick background on the HitPiece scam, a primer on NFTs, and action steps creators and copyright owners can take to protect themselves and their work.

What happened?

HitPiece, a new music NFT platform (still in Beta), was recently caught having scraped Spotify’s API and hosting illegal sales of ‘virtually every song in the world’. Their website marketed NFTs of these songs and albums, including photos and album artwork, as “one of one” NFTs for each unique recording, without the authorization of any of the artists, songwriters, producers, or music owners involved, including the likes of John Lennon, Taylor Swift, BTS, and a slew of independent musicians alike.

Misleading music fans, their website read, “Members build their hit list of their favorite songs, get on leaderboards, and receive real life value such as access and experiences with artists.” The beta site has since gone offline and has been replaced by the following text: “We started the conversation and we’re listening.”

It has been determined that HitPiece was co-founded by Rory Felton Sr. of The Militia Group/Sony Music, investor Jeff Burningham, and veteran rapper MC Serch, who claims to have discovered Nas and has widely promoted the site on social media.

In response to the very public backlash, HitPiece tweeted their intention was always to award royalties to artists and that they are committed to “evolving the product to fit the needs of artists, labels, and fans.” We don’t know about all that.

Besides their basic business venture being flawed, clearly they didn’t do their Music Biz 101 homework on the several parties involved in music royalty distribution (besides artists and labels) along with many other complex steps they would have to take to make this happen.

If you ask us, it all sounds a lot like stealing someone’s art, reproducing it, auctioning it, and then when caught, backpedaling to say that they’ve always had the artists best interest at hand and were planning to send them a “surprise, here’s some of your money” check! (insert: “You’ve Got Mail” ringtone).

While it’s unclear what HitPiece was selling exactly, the files of the songs or simply the receipt of purchase of the concept, it’s still copyright infringement. HitList re-commodified copyrighted metadata from creators to make money without their permission. It’s still unclear how many of the listed NFTs were sold and at what price. The New York Post reported that some listings gained bids as high as $21.5 million.

This is a scam. An extremely gross and lazy one, at that.

How to protect yourself.

If your music was listed on HitPiece, that must have initially been a very confusing and scary situation for you. Even if you were not impacted by this scam, if you are a creator of any content, it’s very likely that something like this could happen to you in the future.

When your content is stolen or misused, your first thought may be to take legal action. On that journey, the first question you will be asked is, “Did you register with the Copyright Office?”

Registering with the U.S. Copyright Office is one of the most critical forms of legal protection against infringement and misuse of your work.

There are many benefits to registering your copyrights. Most important is that registration will provide you with proof that you are the rightful owner of that underlying copyright and would therefore allow you to go after NFT scammers, such as these, and pursue legal action.

Why now?

In today’s legal landscape, copyright registration is a mandatory requirement before you can file a lawsuit. ICYMI, the Supreme Court updated their directive in March of 2019.

Timing matters! Registering your work before your content is misused or stolen can grant you up-to $150k per willful infringement, in addition to your legal fees.

On the flip side, if you wait until something goes wrong, it can take several months to receive an approved registration, at which point you might be granted anywhere between $750 and $30k, which may not even cover legal expenses.

There is no substitute. Other types of registration databases, affidavit services, recording it on the blockchain, or mailing yourself a copy of your work do not provide you with the same rights.

Let’s back up a little. What exactly is an NFT?

NFT stands for non-fungible tokens. They represent digital files or physical items that have been turned into unique digital assets and are not interchangeable.

While often associated with digital artwork and collectible items, an NFT can contain a link to images, music, videos, memes, documents, or any other file that can be stored digitally.

How NFTs work?

To be made accessible, NFTs are minted onto digital ledgers using the blockchain, a completely transparent and decentralized database. The most common blockchain is known as Ethereum. Minting an NFT refers to the process of turning a digital file into a crypto collectible or digital asset that can be digitally transacted in a marketplace.

During the minting process, a creator can choose their initial selling price, determine their ‘drop’ or timed auction date, and schedule royalties from every subsequent sale of their NFT, resulting in a commission for the artist each time the NFT is sold or traded.

Once the NFT is listed for sale, a creator opens bids to anyone who is interested in buying the artwork. Once a bid is accepted, the transaction is publicly recorded and the NFT token is transferred to the new owner, permanently recording the new owner’s identity and the history or details of the trade on the Ethereum blockchain.

This new technology has made selling digital art possible by the way of digital tokens where online collectors can bid on auctions and use cryptocurrencies to purchase art — opening up a whole new digital world for content creators and digital artists to monetize their content.

Why are NFTs such a big deal?

You can’t stop hearing about NFTs and all your favorite artists dropping collections. Why? A large reason for the recent surmounting hype is directly related to the considerable returns that have been reported from creating NFT or crypto art on the blockchain — like the news about Scott Martin, a digital artist under the alias Burnt Toast, who helped create an NFT collection that saw $166.1 million in sales in just 3 months.

What prevents you from copying an image and claiming the NFT? While the digital files themselves are reproducible, the NFTs (tokens) representing the files are limited and provide buyers with a certificate of authenticity that elevates the token beyond cryptocurrency.

Sounds pretty great right? While this technology is an exciting opportunity to monetize art, it’s important to understand that there are implications for your intellectual property.

Read more on our post NFTs Create New Revenue Opportunities — But Is Your Art Protected?

What else can you do to safeguard your ownership?

Art is collaborative by nature, but it’s important to know that when you collaborate with others, you may be giving up ownership of your copyrights, without even realizing it.

Copyright Agreements, including work-for-hires, are vital documents that establish the percentage of ownership of each contributor and collectively decide who can make what decisions about your work, such as licensing, selling, or minting your work as an NFT.

By default, under U.S. copyright law, each of your collaborators automatically owns an equal share and say in your copyright and income, regardless of how minor or major their contribution is — unless you have a copyright ownership agreement in place.

Here’s an action plan with steps you can take immediately.

☐ Register your copyrights to create an established public record of the ownership of your work and take action against infringement and misuse of your work.

☐ Build an agreement to get your collaborators on the same page about what they can (and can’t) do with your content.

☐ Do your homework. With NFT fraud on the rise, make sure you research a marketplace before choosing to buy or sell an NFT.

How Cosynd can help.

Copyright registration and collaboration agreements are the most critical forms of legal protection against infringement and misuse of your work

We created Cosynd to turn the lengthy, bureaucratic, and expensive process of copyright management into one that is approachable, error-proof, time-saving, and perhaps most important to independent creators — affordable.

Whether it’s for your music, videos, imagery, or literature, Cosynd can help you:

• Automate copyright agreements with our unique tool that allows you to build, negotiate, redline, and execute vital documents, such as split sheets, collaboration, producer, and work for hire agreements
• Seamlessly register your copyrights with the U.S. Copyright Office, easier than ever before. Cosynd takes the guesswork out by assigning the proper application and work types needed and will review, error-proof, prepare and e-file each application on your behalf, fully taking responsibility for all communication with the U.S. Copyright Office until you receive your certificate of registration.

Start protecting your content: cosynd.com

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