Judge Reverses Injunction: Rio is Back in Action

For the past three weeks (see previous article) we've been reporting on the troubled plight of Diamond Multimedia's new Rio portable MP3 audio player. Announced in grand fashion by Diamond several months back, the Recording Industry Association of America (RIAA) quickly set its sights on the device, and fired what it hoped would be a fatal shot in the form of an injunction. The RIAA appeared to have succeeded until last week, when US Central District Court California Judge Audrey Collins reversed her initial ruling from 10 days earlier of an injunction, paving the way for the product's release this month. Both the RIAA and the Alliance of Artists and Recording Companies (AARC) are planning an appeal.

At the heart of the dispute between the RIAA and Diamond is whether or not the Rio is covered by the provisions of the Audio Home Recording Act (AHRA), which aims to protect owners of music publishing rights from illegal copying by levying fees (a 2% royalty, which is given to the music industry) and mandating copy-management technology (such as the Serial Copy Management System, or SCMS) in consumer electronics products. The RIAA says the Rio is covered, but according to Andrew Bridges, an attorney representing Diamond Multimedia, "Diamond Multimedia's Rio, which is incapable of independent recording or serial copying, simply is not a device governed by the AHRA."

Apparently the RIAA still disagrees, stating that "Judge Audrey B. Collins accepted most of the legal arguments made by the [RIAA] and concluded that the Rio is likely to be covered by the Audio Home Recording Act. That is, it is likely to be found to be a 'digital audio recording device' within the meaning of the statute, and not just a 'player.' Accordingly, the device would therefore be subject to the requirements of the AHRA relating to the payment of royalties." The RIAA does concede, however, that because most MP3 music clips do not have any type of serial-copy-management encoding in the first place, requiring such protection in a device such as the Rio would be meaningless.

Many consider this a key battle in the clash between Internet/computer culture and the music industry. Computer-based CD recorders and DVD players have long been governed by copy-management rules different from those that regulate their consumer-electronics cousins, allowing fewer restrictions when copying files and backing up data. As evidenced by www.stereophile.com's Vote! results from last week, audiophiles are also using computers in greater numbers than standalone CD recorders for making music CDs.

Major record labels and consumer electronics companies have been largely taken by surprise by the rapid proliferation of MP3 files on the net---a widespread phenomenon that took root without their support. Now they want control of MP3 recorders and players before future generations of non-AHRA-compliant audio technologies become entrenched. The $199 Rio, itself not an inherently impressive audio device, is at the crux of this war---Diamond, a company known for aftermarket computer peripherals such as video accelerators and networking products, is treating the Rio as a new computer-data storage device; as such, it would enjoy fewer copy-protection restrictions.

It is this fine distinction, and the fact that the MP3 format was developed without serial-copy management built-in, that has allowed Diamond to go forward. According to James M. Burger, a Washington lawyer who had previously worked with Apple computer and who helped create the AHRA, if the Rio could record from a typical stereo system, it would be covered by the Act. Burger says that computers and peripherals are still governed by the copyright law, however, "even though the AHRA does not impose technological requirements on their manufacture." Burger recently submitted testimony regarding the injunction.

After the decision, Ken Wirt, vice president of corporate marketing at Diamond Multimedia, stated: "We have always been confident that the Rio is a lawful device. Rio has no recording capability and does not permit serial copying. As a company with a large investment in intellectual property, we certainly support the RIAA's concerns over copyright protection, and have offered to support their efforts in promoting only authorized and licensed music distribution. At the same time, Rio is an important technology development, and we have made a substantial investment in developing and marketing Rio because we believe it enables musicians, other than just those with big record-company contracts, to achieve broad distribution for their music, and it allows the public to participate in an exciting, emerging market."

Because of its tough stance on Rio, the RIAA itself has recently been the target of independent Internet musicians and labels. "This is a great victory for music fans around the world, and a wonderful day for independent record labels and aspiring recording artists, who now have an exciting alternative channel for the distribution of their music," said Bob Kohn, chairman of GoodNoise, a company that markets music on the Internet. "This case pitted the RIAA, which represents the six big record distributors, against indie labels and young recording artists. The RIAA was wrong on the law, and the judge recognized that," Kohn said.

Michael Robertson, publisher of MP3.com, an online MP3 information and file site, reacted by saying that "this is a great decision for artists and freedom of expression. It also sends a signal to the music-industry giants that they can't expect to extend their stranglehold on the music business to the Internet. Hopefully, this ruling will remind people that the battle for digital music cannot and should not be fought in courtrooms or by lobbyists. It is a battle over the consumer's heart, ears, and pocketbook." MP3.com has made a recent RIAA press conference on the issue available in MP3 format on its website---legally, of course. Who knows? You may want to download it onto your Rio and listen while jogging.

Wirt admits that "Yes, there is piracy, but we don't contribute to the piracy. . . . In fact, we're against piracy, we don't endorse the illegitimate sale of music and don't intend to profit from that." But, Wirt added, "It's not the job of the device to determine what's a pirated entity or not. Trying to regulate piracy on the device side is like trying to outlaw ink-jet printers that are used to illegally print out news stories."