THE AVAILABILITY OF THE FAIR USE DEFENSE IN MUSIC PIRACY AND INTERNET TECHNOLOGY.docx

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THE AVAILABILITY OF THE FAIR USE DEFENSE IN MUSIC PIRACY AND INTERNET TECHNOLOGY.docx

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THE AVAILABILITY OF THE FAIR USE DEFENSE IN MUSIC PIRACY AND INTERNET TECHNOLOGY.docx

THEAVAILABILITYOFTHEFAIRUSEDEFENSEINMUSICPIRACYANDINTERNETTECHNOLOGY

52Fed.Comm.L.J.727

FederalCommunicationsLawJournal

May,2000

Note

THEAVAILABILITYOFTHEFAIRUSEDEFENSEINMUSICPIRACYANDINTERNETTECHNOLOGY

SoniaDasa1

theFederalCommunicationsBarAssociation;SoniaDas

I.Introduction728

II.RecordingIndustryAssociationofAmericav.DiamondMultimediaSystems,Inc.729

A.NinthCircuitCaseInterpretation730

B.TheRioCaseasaFairUseIssue732

III.TheHistoricalDevelopmentofFairUse733

A.VideoRecordingTechnologyandFairUse734

B.PhotocopyingandFairUse738

IV.AnalysisofFairUseUndertheRioCase743

A.PurposeandCharacteroftheUse743

B.NatureoftheCopyrightedWork744

C.AmountandSubstantialityoftheWorkUsedinRelationtotheCopyrightedWorkasa745

Whole

D.EffectoftheUseonthePotentialMarketforandValueoftheCopyrightedWork746

V.Conclusion746

*728I.Introduction

Astechnologyadvances,musicalartistsandtherecordingindustryfacenewchallengesforprotectingthecopyrightsoftheirworks.MuchofthenewtechnologyisinexpensiveandreadilyavailableontheInternet,oftenattheexpenseofcopyrightprotection.OnlinestoreslikeAor,musicalartisthomepages,andunofficialWebsitesmaintainedbyfansaresomeofthenewestmeansthroughwhichmusicaficionadosmaylistentoandpurchasemusic.Unfortunately,despitethelargenumberoflegitimatesitesoverwhichlistenersmaylistenorpurchasemusic,themajorityofInternetmusicsitesareillegitimate,featuringmusicpublicizedonlinewithoutpermissionfromthecopyrightholder.Moreover,theInternetoftenleavesthemusicindustrywithoutcopyrightinfringementremediessinceWebmasterscannotbelocatedwithoutsignificantcostsandWebusersareoftentooremovedfromtheinitialinfringement.

BecausetherecordingindustryseekstoprotectitscopyrightsfromInternetpiracy,italsohasencounteredadversitydealingwithcompaniesthatproducedevicesthatencourageorsimplifypiracy.OnesuchdeviceistheRioPMP300（Rio）,ahand-helddevicemanufacturedbyDiamondMultimediaSystems,Inc.,whichmakesportableMP3filesdownloadablefromtheInternet.AlthoughtheRiohasnooutputcapability--itisnotabletogeneratecopies--itstoresmusicon

removablememorycards,whichcreatesanothermethodenablingpeopletopurchase,trade,orobtainpiratedmusic.1

BecauseoftheRio'sfunctioningcapacityanditslackofcertaincopyrightprotectiondevices,theRecordingIndustry

AssociationofAmerica（RIAA）filedalawsuitagainstDiamondMultimediain1998seekingtoenjoinDiamondfromsellinganddistributingtheRio.

ThisNoteexaminessomeofthefactorsthatinfluenceportableMP3technology,andtheMP3impactoncopyright

protectionandfairuse.PartIIofthisNotediscussesthecaseofRecordingIndustryAssociationofAmericav.Diamond

MultimediaSystems,Inc.（Rio）,wheretheRIAAopposedaportablemusicplayermanufacturedbyDiamondMultimediabecausethedevicelackedanticopyingmechanisms,andDiamondMultimediarefusedtopayroyaltiestotheRIAAfromthesaleanduseof*729copyright-protectedmusic.Althoughthecourtdecidedthecaseunderthe

AudioHomeRecordingActof1992（AHRA）,4thecaseinvolvedcopyrightissuesconcerningunauthorizedcopyingandpaymentofroyalties.Therefore,forthepurposeofthisNote,PartIIreclassifiesRioasacasefallingdirectlyundertheCopyrightActof1976.PartIIIpresentsthecaseasafairusequestionanddiscussesthecourts'treatmentofthefourfactorsoffairuseundersection107oftheCopyrightAct.PartIVexaminestheRiocaseunderafairuseanalysis,focusingonwhethertheRiouserhasafairusedefenseinaninfringementactionbycopyrightholders.Finally,PartVdiscusseshowthefairuseargumentcouldaffectthemusicindustry.

II.RecordingIndustryAssociationofAmericav.DiamondMultimediaSystems,Inc.

MusicsoundfilesarereadilyavailableonlineinMPEG1Layer3（MP3）format,atechnologythatcompressesdigitalsoundfiles.MP3hasthecapabilityofcompressinganaudiofilebyafactoroftwelvetoonewithoutsignificantlyreducing

thesoundqualityofthemusic.5ThisisanattractiveformatforInternetusersbecauseitisavailableforanyonetouse,anditpermitslargeamountsofinformationtobestoredonarelativelysmallamountofcomputerspace.Sucheaseinlocating,distributing,andstoringshouldpromptthemusicindustrytoembracethenewtechnologyandexpanditssalesandmarketingmethods,buttherecordingindustryhasinsteadbeenreluctanttomarketMP3salesbecauseofthe

increasedpotentialformusicpiracyandbootlegging.6

Already,themusicindustryestimatesthatitlosesoverfivemilliondollarseachyeartomusicpiracybecauseofnumberofillegitimateWebsitesthatfeaturecopyright-protectedmusicwithoutthepermissionofthecopyrightowner.Oftentimes,collegestudentsoroverseaInternetusers*730maintainsuchWebsitesbyuploadingtheaudiofilesfrompersonalCDcollectionsandplacedonapersonalWebsiteforfriendsandotherstoenjoy.WhiletheRIAA,fightstoeliminateillegitimatemusicsitesontheInternet,newsitespopupeachdaytoreplacethesitesthathavebeeneliminated,andtherecordingindustryissimplyunabletopoliceandclosedownthemanyillegitimatesites.Asaresult,despitethefactthatlegitimateInternetmusicsalestotaledoverthirty-sixmilliondollarsin1997,theRIAAstillassertsthatthe

Internetdistributionofpiratecopieswilldiscouragethepurchaseoflegitimaterecordings.TheRIAAfurtherpredictsthatrevenueslosttoInternetpiracywillsoonsurpassmoneylostthroughallotherformsofpiracycombined.9

A.NinthCircuitCaseInterpretation

InOctober1998,theRIAAfiledalawsuitinCaliforniaseekingtoenjoinDiamondMultimediafromthedistributionandsaleofaportabledevice--theRio--capableofstoringandreplayingdigitalaudiofilestransferredfromtheharddrive

ofapersonalcomputer.10Specifically,theRIAAallegedthattheRioviolatedtheAHRA,11whichrequiresalldigitalaudiorecordingdevicestobeequippedwithcertaincopyrightprotectiondevices,includingasystemthatmonitorsandmanagesthecopyingabilityofthedeviceandaroyaltiesprovision.

TheRio,asmallhand-helddevice,functionslikeawalkmanorportableCDplayer.UserscanplaymusicthroughtheRioandlistentoitusingheadphones.PriortotheRio,listenersofMP3audiofileslistenedtothemusicthoughheadphones

orspeakersattheircomputers.TheRio,however,makeslisteningtoMP3filesportable.

AuseroftheRiodownloadsMP3filesfromtheInternetorfromhisorherpersonalcomputerwhereCDshavebeen

transferred.TheMP3filescanthenbetransferredontoaflashmemorycardplayableintheRio.Thesecardscanholdaboutsixtyminutesofmusicorsixteenhoursofspokenmaterial.14Userscanaddaflashmemorycardtostoreup

toanadditionalhourofmusic,15ortheycanpurchaseadditionalflashmemory*731cardstoholdadifferentsixty-minutesetofmusictoplayintheuser'sRiooranotherRio.

LikethewalkmanandCDplayer,theRiohasnoaudiooutputcapability;16thedevicecanplaybackmusicbutitcannotrecordmusic.Still,theRiosurpassestheolderdevicesinvariousrespects.Unlikethewalkman,whichallowsauseronlytoplayanalogaudiotapes,theRioplaysdigitalmusic.Theresultisacrisper,cleanerrecordingmoretruetotheoriginalrecordingsoundthanananalogcopy.Inaddition,unliketheportableCDplayer,whichalsoplaysdigitalmusic,theRiohasnomovingparts.Thismeansthatthelistenerwillenjoymusicfreeofanyskips,repeats,orotherinterruptionscausedbyanyshocktoanormalportableCDplayer.

InthelawsuitagainstDiamondMultimedia,theRIAAallegedthattheRiodidnotmeettherequirementsforadigital

audiorecordingdeviceundertheAHRA.Specifically,theRIAAallegedthattheRiodidnotemploytherequired

SerialCopyrightManagementSystem（SCMS）,andthatDiamondMultimediaowedroyaltiesundertheActasthemanufactureranddistributorofadigitalaudiorecordingdevice.19

TodeterminewhethertheRioviolatedtheAHRA,thecourthadtodecidewhethertheRiowasadigitalaudiorecordingdevice.TheAHRAdefinesa“digitalaudiorecordingdevice”as:

*732[A]nymachineordeviceofatypecommonlydistributedtoindividualsforusebyindividuals,whetherornotincludedwithoraspartofsomeothermachineordevice,thedigitalrecordingfunctionofwhichisdesignedormarketedfortheprimarypurposeof,andthatiscapableof,

makingadigitalaudiocopiedrecordingforprivateuse.A“digitalaudiocopiedrecording”isdefinedbytheAHRAas“areproductioninadigitalrecordingformatofadigitalmusicrecording,whetherthatreproductionismadedirectlyfromanotherdigitalmusicrecordingorindirectlyfrom

atransmission.”A“digitalmusicalrecording”isdefinedas:

[A]materialobject-

（i）inwhicharefixed,inadigitalrecordingformat,onlysounds,andmaterial,statements,orinstructionsincidentaltothosefixedsounds,ifany,and

（ii）fromwhichthesoundsandmaterialcanbeperceived,reproduced,orotherwisecommunicated,

eitherdirectlyorwiththeaidofamachineordevice.

TheNinthCircuitCourtofAppealsheldthattheRiowasnotadigitalaudiorecordingdevicebecauseitrecordedfromacomputerharddrive,whichCongressexemptedfromtheAHRAsincetheharddrivescontainmorethan“onlysounds,

andmaterial,statements,orinstructionsincidental

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