Artists and Labels Sue Over CD-Ripping Car Stereo Systems

[Mike]

Back in July, we wrote about a ridiculous lawsuit filed by the AARC -- the Alliance of Artists and Recording Companies -- trying to make use of a misreading of the Audio Home Recording Act (AHRA) to pretend that it means that Ford and GM have to pay royalty money for every CD ripping car stereo they install. As we noted, the AHRA is basically a deadletter law. The law itself effectively killed any possible innovation in the area that it was designed to tax for royalties -- machines that make repeated copies of content. The recording industry tried to pretend that basic MP3 players met the definition and sued one of the first such players, the Diamond Rio. The court soundly rejected the argument in that case, and thanks to that, probably 99% of you have MP3 players (or, nowadays, smartphones that play MP3s). In our original post, we went into much greater detail about why the AARC was clearly misreading both the law and the caselaw in a desperate attempt to kick up some royalties from the big automakers.

Ford (along with Clarion) have now responded and do a damn good job explaining why the AARC is simply wrong. The the filing is pretty short and sweet in explaining the problems with the AARC's argument:

Congress enacted the AHRA in 1992 to regulate a then emerging technology that for the first time enabled high quality serial copying of copyrighted musical recordings. “Serial copying” refers to the creation of copies of a musical recording from another copy of that recording as opposed to the creation of copies from the original recording. This activity concerned the music industry, which was a proponent of the AHRA. However, rather than directly prohibit serial copying outright, Congress exempted certain products and devices— specifically including computers and hard drives—from compliance while requiring other specifically defined “devices” to also incorporate technology to prevent serial copying. The automotive navigation systems here are exempted.

Neither Ford nor Clarion is in the business of facilitating the serial copying of music. Ford is one of the largest automobile manufacturers in the world; it builds and sells some of the best-selling cars and trucks, certain models of which include navigation systems. Clarion manufactures and supplies Ford with navigation systems for its vehicles. Each such navigation system is a complex computer and includes a central processing unit that interprets and executes complex instructions and a 40 GB hard drive for storage of an operating system, computer software programs, databases, and other information (“Nav System”).

[....]

By its own Complaint, Plaintiff admits that this feature of Defendants’ Nav System consists of recording CDs to the system’s own hard drive, where the music is stored with various software programs and other data. It alleges nothing about making serial copies of CDs, digital audio tapes and the like. Under a plain reading of the AHRA, these automobiles with a Nav System are not capable of making a “digital audio copied recording” of a “digital musical recording” as defined under the Act. This is because the AHRA states that digital musical recordings do not include (1) material objects in which one or more computer programs are fixed or (2) material objects in which data other than sounds are fixed. Here, the Nav Systems are nothing less than automotive computers with hard drives containing both programs and data other than sounds. They do not reproduce digital music recordings in materials objects addressed by the statute, that is, CDs, LPs, cassettes, or digital audio tapes. The Nav Systems are outside the AHRA’s scope.

Not surprisingly, the filing relies heavily on the ruling in the Diamond case, and I see that one of the lawyers listed on the filing is Andrew Bridges, who handled the Diamond case in the first place. You never know how these kinds of court cases will turn out in the end, but it seems unlikely that the AARC is going to get rich off of this last gasp effort to squeeze money out of automakers.

Originally Published: Tue, 14 Oct 2014 22:52:44 GMT
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[Picklock]

geezz..
they're really depressed to have an extra quick and easy cash by these lawsuit..

[ddoking007]

got that right though I have a feeling they are going to go after Google next.

[Ernesto]

Toward the end of the last century record labels feared that home taping would kill the music industry.

To counter the threat cassette tape recorders posed at the time, they asked Congress to take action.

This eventually resulted in the Audio Home Recording Act (AHRA) of 1992. Under this law importers and manufacturers must pay royalties on “digital audio recording devices,” among other things.

The legislation is still in play today. Instead of targeting cassette recorders, however, the threats are now other copying devices. According to the Alliance of Artists and Recording Companies, this includes media entertainment systems that are built into many cars.

This week the music group, which lists major record labels and 300,000 artists among its members, sued Chrysler and its technology partner Mitsubishi (pdf) for failing to pay royalties.

The dispute revolves around Chrysler’s media entertainment systems including “MyGIG” and “Uconnect Media Center” which allow car owners to rip CDs to a hard drive.

“These devices are covered by the AHRA, but the defendants have refused to pay royalties on them or include the required serial copy protections,” AARC Executive Director Linda Bocchi comments.

The music group reached out to Chrysler and Mitsubishi hoping to settle the issue, but these talks failed. As a result AARC saw no other option than to take the case to court.

“We had hoped Chrysler and the Mitsubishi Electric companies would settle their liability and begin paying what they owe once they had an opportunity to study and assess the issues,” Bocchi says.

“But it has now become painfully clear they have no intention of complying with the law. While litigation is always a last resort, it is clear this lawsuit is the only way to protect our members’ rights.”

The current lawsuit follows an earlier case against Ford and General Motors, which is still ongoing.

In both cases artists and record labels are looking for statutory damages, which could amount to hundreds of millions of dollars. In addition, they want to prevent the manufacturers from selling these unauthorized devices in their cars.

Ford has already filed a motion to dismiss arguing that AHRA doesn’t apply to their systems, and the other defendants including Chrysler are likely to do the same. Whose side the court will agree with is expected to become clear in the months to come.

Originally Published: Wed, 19 Nov 2014 15:59:21 +0000
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[stormium]

got that right though I have a feeling they are going to go after Google next.

more like chrysler and mitsubishi.