Federal appeals court OKs digital-music player

Thursday, June 17, 1999

A federal appeals court has dealt a major blow to the recording industry's lawsuit over digital music, ruling that a popular, hand-held device that enables music lovers to download and play music from the Internet does not violate federal anti-piracy laws.

In a 3-0 decision on June 15, a panel of the 9th U.S. Circuit Court of Appeals said that the Rio MP300 player manufactured by Diamond Multimedia does not qualify as a “digital audio recording device” and is not subject to restrictions imposed by the 1992 Audio Home Recording Act.

Judge Diarmuid O'Scannlain, writing for the panel, said that the “brave new world of Internet music distribution” was composed of new technologies inconsistent with the 1992 law.

O'Scannlain said that the player — which enables users to download music files from the Internet and play them away from their computers — merely allowed consumers to use copyrighted music in their own ways.

In its lawsuit filed last October, Recording Industry Association of America officials argue that such players exploit an illegal market allowing computer users to download free music without any compensation to the artists who created it. Although the group doesn't consider the MP3 format itself to be illegal, it claims many people misuse the technology by selling pirated versions of popular songs.

But Diamond Multimedia and owners of MP3 sites defend the use of the music player, saying it gives listeners more freedom to enjoy the music they want. They add that most MP3 sites offer legally obtained music.

In a countersuit filed in December, Diamond Multimedia claimed that RIAA had engaged in antitrust and illegal business practices “by conspiring to restrain trade and restrict competition.” The claim accuses RIAA of securing deals from other manufacturers to halt sales of digital-music players.

Diamond Multimedia also sued RIAA over its allegations that the company was linked to illegal uses of the MP3 format.

David Watkins of Diamond Multimedia said in a statement sent to the First Amendment Center that the ruling opened new opportunities for the MP3 market.

“We have always believed that the Rio line of devices operated well within the law,” said Watkins, adding that the company has considered it “as a playback-only device for the thousands of legitimate music and audio tracks on the Internet.”

In a statement, RIAA expressed disappointment with the ruling, saying the appeals court obviously ignored the intent of Congress as expressed in the Audio Home Recording Act.

“We filed this lawsuit because unchecked piracy on the Internet threatens the development of a legitimate marketplace for online music, a marketplace that consumers want,” the statement reads.

But RIAA says the marketplace has overtaken the lawsuit and may have rendered it moot, although officials haven't decided to drop it yet. The organization notes that a joint effort among RIAA, music producers and manufacturers called the Secure Digital Music Initiative should result in guidelines for Internet music formats and devices by the end of the year.

“The technology and music industries have already come together, in voluntary initiatives like the Secure Digital Music Initiative, to create a secure environment in which consumers can access the music they love in new ways,” read the organization's statement.