October 9, 1998 3:50 PM PDT

Music group sues over MP3 device

Music industry trade group the Recording Industry Association of America is turning up the heat in its fight against the MP3 format by suing a multimedia firm, claiming it is promoting the illegal distribution of copyrighted music off the Internet.

The RIAA today announced it is seeking an injunction against San Jose-based Diamond Multimedia to halt the release of its Rio PMP300 player.

The case underscores a number of issues regarding copyright and intellectual property law that have pitted record industry stalwarts against underground Internet music distributors.

The suit comes on the same day the Senate passed a copyright bill that excluded a provision the RIAA helped author, which would require Webcasters to pay licensing fees to record companies.

At the heart of the RIAA complaint is MP3 technology (MPEG 1, Audio Layer 3), which compresses high-quality sound files so they can be downloaded quickly onto a PC hard drive. The RIAA has pinned MP3 technology as a threat to the recording industry, and has taken legal action against sites that use it to offer copyrighted music for download.

"We don't think that a legitimate commercial online market can occur if the market is first taken over by illegal copies," said Cary Sherman, senior executive vice president and general counsel for the RIAA.

"If people can get music for free and take it away in the form of a Rio-type recorder, how can a legitimate commercial market emerge when it's in competition with a marketplace that's filled with illegal copies that are made for free?" he added.

The RIAA's action claimed Rio technology violated the 1992 Audio Home Recording Act, which requires digital recording devices, such as digital audio tapes (DAT), to encode a serial copy management system.

Since DATs are able to record music from other DATs without degrading the music quality, the record industry perceived the technology as a threat. Thus, the legislation required DAT firms to incorporate a copy management system to prevent multiple generations of a given recording.

The RIAA has classified the Rio as a digital recording device, thus giving it reason to seek the injunction.

"MP3 devices are covered by [the Audio Home Recording Act], and just as clearly they are in violation with it," said Hilary Rosen, president and chief executive of the RIAA. "Diamond Multimedia product doesn't comply with the [the Audio Home Recording Act] because it's not registered with the copyright office, it doesn't incorporate [a serial copy management system], and it doesn't pay royalties. Rio not only violates the law, it fails to respect the creativity of the artists."

In response to the claims made in the RIAA's suit, Diamond noted that the Rio is not a recording device to begin with, but a device that plays back files saved on a computer. The company also said that not allowing a playback device such as Rio would be like "newspapers outlawing ink-jet printers" to prevent users from reading articles while commuting to work.

"The biggest legal issue would be: is the Rio a digital audio recording device as defined by the act?" said Brad Biddle, Brad Biddle, an attorney specializing in Net and e-commerce issues with Cooley Godward and an adjunct professor of cyberspace law at the California Western School of Law. "There's a plausible argument that it's not. There's never rerecording done on the Rio."

The issue that will be debated most heavily in this case is how to define the act of recording when using a number of media: the Net, the PC, and the portable device.

Even though computers essentially save downloaded files onto a hard drive, computers are not included in the Audio Home Recording Act because they serve additional functions beyond downloading. This fact will be Diamond's primary defense.

"The central question here is, does downloading constitute recording?" said Mark Mooradian, an analyst at Jupiter Communications. "You can get a roomful of lawyers and argue about that into the millennium."

The RIAA hopes other firms will join together in creating a standard where copyrights can be protected and everyone has equal opportunity in downloading files onto any device, said Sherman. The RIAA wants to play a significant role in establishing the standard.

However, should other firms decide to follow Diamond's example, the RIAA would not rule out pursuing legal action, unless the manufacturer ensured the industry that it would only play MP3 files that were previously approved by copyright holders, Sherman said.

Nonetheless, the RIAA has moved to prevent the sales and distribution of the device, which was slated to be rolled out at the end of the month for $199.

"The music industry is crashing into the Internet," said Michael Robertson, who runs MP3.com, a site that has struck deals with recording artists and record labels to allow Netizens to download music files. "They don't want to go into the Digital Age, and MP3 is dragging them there."

 

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