July 9, 1999
By CARL S.
In Court's View, MP3 Player is Just a 'Space
potatoes have long enjoyed the precious right to use a videocassette
recorder to tape a television program so they can watch it at a more
convenient time. Under a landmark 1984 Supreme Court decision in the
case, this practice of "time-shifting" is considered "fair use"
and is not an infringement on the program owner's copyright.
consumers have a similar right to use their computers to make personal
copies of digital works they have already purchased or legitimately
In an important decision, a Federal appeals court has partially
answered that question by declaring that just as television viewers
have the right to time-shift, computer users have the right to
"space-shift" -- they can make additional copies of digital files they
have obtained lawfully in order to listen to them in different places.
The court's pronouncement came in the closely watched case of RIAA
v. Diamond Multimedia, in which a panel of three judges
from the United States Court of Appeals for the Ninth Circuit in
Pasadena, Calif., were called upon to determine
the fate of Diamond's Rio,
a portable gadget which stores music in digital form and plays it back
Rio users download songs in the form of compressed MP3 files from
their computer hard drives into the player's memory. The Recording
Industry Association of America (RIAA), a trade group
representing record companies, has fought the Rio, saying it
encourages music piracy.
Judge Diarmuid F. O'Scannlain, writing for the unanimous panel,
said that the cigarette-pack-sized player "merely makes copies in
order to render portable, or 'space-shift,' those files that already
reside on a user's hard drive." Such copying, as with time-shifting,
"is paradigmatic non-commercial personal use," which is entirely
consistent with the copyright law, the court said.
Some copyright lawyers have been quick to hail the significance of
the court's opinion, which, they say, clarifies a disputed area of the
law and will lead to more widespread distribution of digital music via
|Consumers are free to space-shift.
"The court has endorsed the point that it is entirely proper for
consumers to make copies of digital recordings that they own or have
acquired properly," said Andrew P. Bridges, a lawyer who represented
Diamond Multimedia in the case. The RIAA has long denied
that this privilege exists, he said.
Bridges added that under the ruling, consumers may, for example,
legitimately transfer music from their audio CDs to their hard drive,
convert the files to MP3 format and either play them on the computer
or download copies of the files to the Rio or to other devices.
Consumers may also download authorized MP3 files, like promotional
freebies or non-copyrighted works, from the Internet and make copies
of them on their hard drives and in the Rio, said Bridges. He
cautioned that in his view "space-shifting" does not extend to the
downloading of unauthorized or pirated MP3 files.
Shari Steele, legal director of the Electronic Frontier Foundation,
which recently launched a special task force dedicated to protecting
the rights of digital audio consumers, said the court's decision was
"Consumers are free to space-shift," said Steele. They can take an
authorized recording on their hard drive and make a copy for their car
stereo, a copy for their portable Rio player, or a copy for their home
stereo, making as many copies as they want, she said.
A spokesman for the RIAA declined to comment on the court's
opinion, which was issued June 15. In a press statement, the group
said it was "disappointed" by the ruling and would pursue its efforts
with the Secure Digital Music Initiative, which is developing
standards for downloaded music with copyright protection. In past
comments, the RIAA has said that the Rio, which costs less than
$200, would further encourage the online exchange of pirated music.
Last year, the RIAA and another group representing artists
and recording companies brought suit to stop the production of the
Rio, saying that the device violated the Audio Home Recording Act of
That law, which applies to
"digital audio recording devices," generally allows consumers to use
products like digital audiotape players to make digital copies of
songs for personal use. The hitch is that manufacturers of the
recording devices must pay a royalty to artist organizations,
generally 2 percent of the machine's wholesale cost. In addition, each
recorder must contain a system that prevents the devices from making
serial copies -- copies of copies. In its lawsuit, the RIAA
charged that because the maker of the Rio paid no royalties and failed
to install the copy management system, the portable player was an
illegal product that would lead to more piracy in cyberspace.
In affirming the district court's denial of an injunction against
Diamond, the appeals court held that the Audio Home Recording
Act did not apply to the Rio, which is not a "digital audio recording
device" at all but rather a computer peripheral. In addition, the
court held that the hard drive of a personal computer, which also
makes copies of MP3 files for downloading to the Rio, is not governed
by the act.
Accordingly, the court reasoned, under standard fair-use principles
outlined in the Betamax case, consumers are free to make unlimited
copies of authorized audio files on their hard drives for portable,
private and non-commercial use -- without any royalty payments to the
music industry and without a chip that limits the number of copies
that can be made.
"One of the most important aspects of this decision was the court's
holding that computer hard drives are not subject to the Audio Home
Recording Act," said EFF's Steele. This means that computer
manufacturers can continue to design their products without any
restrictions from the audio industry, she said.
One veteran copyright lawyer pointed out that if the Audio Home
Recording Act does not apply to personal computers, which are
important copying devices in the digital age, the law becomes almost
meaningless and offers little or no protection to copyright holders,
who worry about online music piracy.
"This leaves the record industry in trouble," said Robert
Osterberg, a New York lawyer with Abelman, Frayne & Schwab who
specializes in the area of copyright and music. "Unfortunately, they
have a wide gap to fill." Osterberg said he believes the RIAA
will seek to lobby Congress to have the law amended to extend to
computers and computer peripherals.
Robert Zissu, a copyright lawyer at Fross Zelnick Lehrman &
Zissu in New York and a past president of the Copyright Society of the
United States of America, said he believed the appeals court was
correct in its "space-shifting" conclusion. He added that the logical
implications of the ruling are quite wide.
They might also seem a bit strange. If a consumer has a fair-use
right to make a copy of a digital work that he owns for portable use,
reasoned Zissu, then the consumer might also have the right to make a
copy of a work that he does not own for portable use. In each case,
the consumer's "fair use" is determined with regard to his use of his
copy, not with respect to the source of the copy.
The record companies can go after a college student who maintains a
pirate Web site with unauthorized MP3 files, Zissu said. "That guy is
going beyond home use. But if I make a copy of one of those songs for
home use, that's fair use."
Osterberg, who said he disagreed with the court's conclusion about
the legitimacy of "space-shifting," agreed with Zissu about the
ruling's wider implications. "The mere fact that a copy is taken from
an unauthorized source" does not negate fair use, he said.
"This is an important case," said Osterberg. "It is something that
has surely captured the attention of the record industry."
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