MP3 Player Gets Court Approval

SAN FRANCISCO (Reuters) — In a major defeat for the recording industry, a federal appeals court ruled Tuesday that a popular device used to download and play music from the Internet did not violate federal anti-piracy laws.   The 9th U.S. Circuit Court of Appeals in San Francisco found that the Rio MP300, manufactured by Diamond Multimedia Systems Inc., did not qualify as a "digital audio recording device" and was not subject to the restrictions of the 1992 Audio Home Recording Act . In the 3-0 opinion, Judge Diarmuid F. O'Scannlain wrote that the "brave new world of Internet music distribution" was built on new technologies that did not mesh perfectly with existing law.   The court found that the Rio, a pager-sized device that can store CD-quality songs encoded in the so-called MP3 format, was not primarily a recorder and so was not subject to the 1992 act. "The Rio's operation is entirely consistent with the act's main purpose — the facilitation of personal use," O'Scannlain wrote, saying the device would allow consumers to record copyrighted music for their own private, noncommercial use.   The court's decision torpedoed a suit filed in October by the Recording Industry Association of America, which had targeted the Rio and Internet MP3 music files as a major source of music piracy.   MP3 is widely used by lesser-known artists to distribute their music, but the record industry fears the format will lead to rampant piracy in cyberspace, where files can be copied and sent rapidly. After a lower court rejected its request for a preliminary injunction barring sales of the Rio last fall, the industry association appealed to the San Francisco-based 9th Circuit.   In a statement released after the ruling, the RIAA said it was disappointed with the court's decision. "We filed this lawsuit because unchecked piracy on the Internet threatens the development of a legitimate marketplace for online music, a marketplace that consumers want," the statement said.   David Watkins, president of RioPort Inc., Diamond Multimedia's Internet music subsidiary, said the decision created a whole new future for music online.   "The ruling opens a host of new opportunities for us," Watkins said in a statement. "We have always believed that the Rio line of devices operated well within the law … as a playback-only device for the thousands of legitimate music and audio tracks on the Internet."   At an MP3 conference that kicked off in San Diego on Tuesday, makers of other MP3 playback devices hailed the ruling, saying consumers were the winners.   "It's not possible to stop this revolution," said Hock Leow, vice president of the multimedia division of Creative Labs, which plans to ship its device, dubbed the Nomad, later this month. "Everyone is saying, 'We are going to be good citizens, but at the same time we want to do what the customer wants,'" Leow said.   Doug Marrison, president of I-Jam Multimedia, a new entrant into the digital music arena with its line of colorful MP3 players, said the gadgets were no different from videocassette recorders or compact disc recorders.   "The decision is something that's obviously encouraging to all the hardware people out there," Marrison said. "Manufacturers aren't saying, 'Go out and rip off licensed music.' This has already been accepted by consumers."   Following Tuesday's ruling, both the RIAA and hardware and software companies said they would devote their energies to a joint effort dubbed the Secure Digital Music Initiative (SDMI), which aims to establish guidelines for Internet music formats and devices by the end of the year.   Watkins said the makers of Rio "continue to share the RIAA's concerns about piracy and protecting the rights of content owners" and would work to make SDMI a success.   The RIAA, for its part, said it was convinced that "the shared interest in such a marketplace" had overtaken the Rio lawsuit. "The technology and music industries have already come together — to create a secure environment in which consumers can access the music they love in new ways," it said. Reuters/Variety