The Internet Music Wars: Court Rejects Challenge to MP3 Player
By Jere M. Webb
The U.S. Court of Appeals for the Ninth Circuit has issued the first significant court opinion in the battle between the music recording industry and consumers of digital and downloadable MP3 music. Score Round One for the consumers.
The case involved a challenge to Diamond Multimedia’s "Rio" portable MP3 Player. MP3 (which stands for MPEG-1 Audio Layer 3) is the most popular digital audio compression technology in use on the Internet.
To understand what the battle is all about, you need some background in digital music, compression technology and copyright law.
The starting point is the introduction into the consumer electronics market in the 1980s of digital audio recordings. Prior to this if someone wanted to make a copy of a cassette tape or compact disc, he or she was subject to the limitations of analog technology with the result that "second generation" copies had significantly degraded audio quality from the original. With digital technologies, there is almost no decrease in sound quality when copies are made. Obviously, this opened a big avenue for music pirates.
The second development, and a much more recent one, arose through the advent of compression technology. Until a few years ago, the Internet was not a viable way to distribute music because the music files were too big. Prior to the advent of compression technology, downloading a single song could take several hours. Now someone with a fast Internet connection (such as a cable modem, satellite connection, or a digital subscriber line) could download an entire CD of music onto their hard drive in a matter of minutes. This opened up the Internet as a whole new arena for music piracy. There are now numerous Web sites where one can download both pirated and legitimate copies of recorded music. You can sit at your computer and play digital music with virtual CD quality, and you can download music for later listening, arrangement, and copying.
The music industry saw all of this coming and has been taking steps to shut down pirate music Web sites and generally to revamp itself to deal with the digital age. However, the straw that broke the camel’s back was when the whole process went portable through Diamond Multimedia’s introduction of its popular "Rio" player. The Rio allows digitized music in a personal computer’s hard drive to be downloaded into the Rio player and listened to on a portable basis via headphones. The Rio can store approximately 1 hour of music and 16 hours of spoken material. The Rio cannot record music, nor can it copy files in its memory or transfer such files to another computer or other device. However, one can purchase flash memory cards that add to the memory capacity of the Rio and allow one to pass around files containing downloaded digital music for playing on another Rio player. Needless to say, the music industry was appalled at the potential for the Rio, and similar devices, to upset its traditional channels of music distribution.
The final thing you need to understand is the somewhat peculiar position of music in the copyright world. Unlike other creative works, sound recordings have never had a general right of performance. In fact, until 1972 sound recordings were not protected by federal copyright law at all, not even against copying by pirates. Prior to 1972 anyone was free to make copies of records and sell them without violating the recording company’s copyrights. When Congress finally did get around to providing protection against piracy, it declined to provide a public performance right, which explains why deejays can play records over the radio without paying royalties to record companies. That is still the law today, with one exception. In 1995, Congress passed the Digital Performance Right and Sound Recordings Act, which created a limited public performance right for digital audio transmissions.
This brings us to the case decided by the Ninth Circuit, which is Recording Industry Association of America v. Diamond Multimedia Systems. The full text of that opinion can be found at http:/www.vcilp.org/Fed-Ct/Circuit/9th/opinions/9856727.htm. The specific issue in the case was whether the Rio is a prohibited digital audio recording device under the Audio Home Recording Act of 1992 (the "Act"). The court held that it is not.
The court explained that "the Act does not broadly prohibit digital serial copying of copyright protected audio recordings. Instead, the Act places restrictions only on a specific type of recording device," and a digital audio recording device must be capable of reproducing a "digital music recording." The problem was that Congress had defined "digital music recording" in a way so as to exclude music on the hard drive of a personal computer. The legislative history was clear that Congress was not prepared to regulate personal computers as digital recording devices simply because it was possible to download and replay digitized music. What was not clear in the legislative history was how the Act would apply to devices that download music from the personal computer’s hard drive. However, the court held that the plain language of the statute precluded coverage of the Rio.
The case can be seen as an analog to the infamous Betamax case of 1984, in which the U.S. Supreme Court upheld "time shifting" of TV programs via video recording devices as constituting "fair use" under the Copyright Act. The Diamond Multimedia decision sanctions "space shifting" of music purchased or legitimately downloaded.
The MP3 wars are just getting started. There are some heavy hitters in this industry. They are not going to sit idly by and let control of music distribution be taken away from them. Stay tuned for further developments.
If you have questions or want more information about this topic, contact Jere Webb.