Ford Motor Company Aims to Put Brakes on Music Industry's DARD Lawsuit

A royalty collection outfit is looking to penalize the automaker for not paying royalties on its "music copying" vehicles
Ford

This year, about 17 million automobiles will be sold in the United States. Some of these cars allow drivers to store personal music collections, and the record industry wants to do something about this fact.

In July, the Alliance of Artists and Recording Companies brought a lawsuit against General Motors, the Ford Motor Company and their suppliers. The plaintiffs are seeking $2,500 for every DARD-loaded ("digital audio recording device") vehicle distributed in the last three years. For a music industry royalty outfit that collected less than $1 million last year, the Alliance was bringing a potential claim worth billions of dollars.

On Friday, Ford looked to protect its Mustangs, its Tauruses and its Lincoln Navigators from the music industry's lusty sights. "Neither Ford nor Clarion is in the business of facilitating the serial copying of music," says the automaker in a motion to dismiss.

The Alliance is using a specific legal vehicle to get from point A (the filing of a lawsuit) to point B (a judge's order of damages).

In 1992, when consumers were buying blank CDs, Congress passed the Audio Home Recording Act. Back then, the record industry was concerned about how perfect digital copies would erode the market for analog recordings, and those making personal media devices wanted assurances that they wouldn't be sued for contributory copyright infringement. So Congress reached a middle ground by saving those who made DARD from liability as long as they forked over $1 to $12 per DARD to the Copyright Office.

The music industry has changed a lot in the last two decades. Some argue that digital distributors should still be taxed, but the reason that the Audio Home Recording Act isn't buzzed about more is an exemption given to devices “in which one or more computer programs are fixed."

In 1999, the 9th Circuit Court of Appeals examined the Rio MP3 player and came to the conclusion that computers and hard drives weren't DARDs.

Ford hopes that its Nav System, which does things like calculating navigational routes, playing DVDs, storing addresses and, yes, recording music from personal CDs, isn't deemed a DARD either. The key to Ford's argument is that users are allowed fair use to space shift. The system itself — a "hard drive" that stores, but isn't akin to a blank CD, which can transfer copies of recordings to another device — is something Ford believes was exempted by the 1992 law.

"The Nav System is like the Rio device in Diamond Multimedia because neither device allows the user to copy music off of the device," says the defendant. "Since the Nav System, like the Rio before it, does not engage in serial copying, the AHRA does not apply."

Email: Eriq.Gardner@THR.com
Twitter: @eriqgardner

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