XM & the RIAA, Part Deux
By Wes Phillips July 23, 2006 — In May, the Recording Industry Association of America (RIAA) sued XM Satellite Radio over the Pioneer Inno portable player, which has a 1GB recording capacity, but no way of porting the recordings outside the player.

The RIAA alleged that the Inno enabled "massive wholesale infringement of . . . copyrighted recordings." On July 17, XM requested that the United States District Court for the Southern District of New York dismiss the suit, claiming that the Audio Home Recording Act of 1992 shields the Inno from liability for copyright infringement. XM says that the AHRA forbids parties from "filing claims for copyright infringement based on the manufacture, importation, sale or consumer use of 'digital audio recording devices.'"

The company compared the Inno to a terrestrial radio, which allows consumers to record cassette copies of programs, which are not "perfect copies" of the music, but may contain "overlapping beginnings and ends of adjacent songs" and DJ chatter. XM said that, should the consumer desire "pristine" recordings, he or she could bookmark songs for purchase through its XM+Napster service.

The company also pointed out that content stored on the Inno cannot be saved past the termination of the device's XM subscription.

Jonathan Lamy, an attorney for the RIAA, claimed XM's arguments were "arcane." Lamy said, "If XM wants to compete with iTunes, Rhapsody and similar music distribution services, it needs to obtain the appropriate authorization," referring to the record industry's efforts to convince XM to purchase costly distribution licenses similar to those required for Internet downloading services, Apple's iTunes, for example. Sirius, XM's chief rival, has agreed to purchase distribution licenses to fend off a similar suit.

Other groups—specifically the Consumer Electronics Association (CEA) and the Home Recording Rights Coalition (HRRC)—filed supporting court documents, reinforcing XM's claim that the AHRA prohibited the RIAA's suit.

Also chiming in on XM's behalf was The Washington Post's business page writer Steven Pearlstein, who said in his Wednesday column: "You'd think an industry that has managed to turn out so much mediocre music for so many years, done so much to lower moral standards, and lost so much business to illegal file-sharing would have something better to do than attack some of the few distributors that are actually expanding the market and charging for music. But the prospect that the industry might not extract every last penny out of the new satellite radio services and their customers is simply unacceptable to the Recording Industry Association of America."

Pearlstein went on, "The fundamental problem here is that there really isn't a free and open 'market' for recorded music....In an effort to encourage the development of new services, Congress required record companies to license all their music to satellite and Internet radio operators at a mutually agreed-upon price. But if no agreement is reached, price and terms are to be determined by regulators according to various and competing criteria—a process that amounts to nothing more than an invitation to endless litigation."

Hmm, endless litigation—that has a familiar ring to it. I think that's a song we've all heard before.