General Motors, the Ford Motor Company, and their suppliers are under fire by the Alliance of Artists and Recording Companies, in a lawsuit that began in July. The focus is the fact that some Ford cars allow drivers to store personal digital music collections. For the record industry, this presents a threat.
About 17 million automobiles will be sold in the United States just this year. The plaintiffs are seeking $2,500 for every vehicle sold in the past three years that contains a Digital Audio Recording Device (DARD). It is a bold move for an Alliance that collected less than $1 million on music royalties last year. This auto claim could be worth billions of dollars. On Friday, Ford filed a motion to dismiss, stating that “Neither Ford nor Clarion is in the business of facilitating the serial copying of music.”
The case raises some interesting questions about music storage, and is closely related to the Audio Home Recording Act (AHRA) passed by Congress in 1992. Enacted back when consumers were first purchasing blank CDs, it was basically a compromise for the record industry and the producers of personal media devices. For the industry, the concern was consumer access to perfect digital copies, and how that might negatively impact the market for analog recordings. On the tech side, the companies producing devices wanted to ensure they would not be sued for contributory copyright infringement. Congress met them in the middle with the Audio Home Recording Act, which stated that those who produced DARDs would be safe from liability, as long as they paid the Copyright Office between $1 and $12 per each device sold.
But a lot has gone down in the past two decades, and the digital music industry is an ever-changing beast. Whether or not digital distributors should still be taxed is an argument that remains unsettled. However, there would probably be a lot more discussion about the Audio Home Recording Act had the 9th Circuit Court of Appeals not made an important revision in 1999, in relation to the Diamond Multimedia’s Rio MP3 player. It was determined that computers and hard drives “in which one or more computer programs are fixed” do not qualify as DARDs, and are therefore exempt from the tax.
Ford is now banking on the notion that their Nav System does not count as a DARD either, seeing as it also performs tasks like providing navigational routes, storing addresses and playing DVDs. But their best weapon of defense is the fact that their system is distinct from a blank CD, in that it cannot transfer copies of recordings to another device. It can only store them internally, like a hard drive.
The automaker made this angle clear in their recent counterargument, referring to Rio as a comparison. “The Nav System is like the Rio device in Diamond Multimedia because neither device allows the user to copy music off of the device. Since the Nav System, like the Rio before it, does not engage in serial copying, the AHRA does not apply.”