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Recording Industry Association of America v. Diamond Multimedia Systems, Inc., No. 98-56918 (Ninth Circuit, June 15, 1999)

Summary

In a decision of June 15, 1999, the United States Court of Appeals for the Ninth Circuit held that the AHRA does not apply to music recorded through a computer. The Appeals Court reasoned that what occurs when a song is downloaded from a PC to the Rio is not the reproduction of a digital "musical recording," as required by the AHRA, but the reproduction of a computer hard-drive. Conceiving of a hard-drive as an indivisible whole, the Court reasoned that since a typical hard-drive contains many programs and databases unrelated to the reproduction of "sound," it could not be considered a "musical recording."

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Analysis

In October, 1998, the United States District Court for the District of California denied a request by the Recording Industry Association of America (RIAA) for a preliminary injunction barring the manufacture and sale of Diamond Multimedia Systems, Inc.'s "Rio," a Walkman-like device which, with accompanying software, will download 60 minutes of digital music from a PC for portable playback. The RIAA contended that the Rio was covered as a "digital audio recording device" under the Audio Home Recording Act of 1992 (AHRA), thus incurring royalty obligations and requiring a copyright-protecting "serial-copy management system" (SCMS).

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In a decision of June 15, 1999, the United States Court of Appeals for the Ninth Circuit upheld the District Court's decision, but did so after concluding that the AHRA simply does not apply to music recorded through a computer. (Meanwhile, Diamond has incorporated an SCMS in the Rio's accompanying software, such that the principal remaining issue appears to be the company's royalty obligations.)

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The Appeals Court reasoned that what occurs when a song is downloaded from a PC to the Rio is not the reproduction of a digital "musical recording," as required by the AHRA, but the reproduction of a computer hard-drive. Conceiving of a hard-drive as an indivisible whole, the Court reasoned that since a typical hard-drive contains many programs and databases unrelated to the reproduction of "sound," it could not be considered a "musical recording" covered by the Act--both because the Act defines such a recording as containing "only sound" and incidental material, and because the Act specifically excludes objects containing "computer programs" not incidental to reproducing sound.

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Observing that the AHRA "seems to have been expressly designed to create th[e] loophole" of allowing digital audio "to be ‘laundered' by passage through a computer," the Court concluded that the Act's reach was limited to non-computer devices designed for the purpose of recording directly from CD's and mini-discs, digital and analog cassettes (including compact cassettes), and LP's, and/or for recording public transmissions of such material (i.e., radio broadcasts, but not Internet broadcasts).


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