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Alliance of Artists and Recording Companies Continues to Pursue Class Action Suit Against Car Companies for Unpaid Music Royalties

By Brittany Pont

What is the Alliance of Artists and Recording Companies (AARC)?

AARC is a nonprofit organization that collects and distributes both hometaping/private copy and rental/lending royalties generated from the Audio Home Recording Act of 1992 (AHRA). Founded in 1993, AARC is the sole administrator of this type of royalty in the United States, and while it initially just administered domestic royalties, its mandate was later expanded to administer foreign royalties as well. http://wp.aarcroyalties.com/what-is-aarc/

What is the AHRA?

Prior to 1992, private copying of music was illegal, but the music industry had no recourse for the monetary loss it suffered due to its widespread practice. To balance the right to use and own a device with the ability to record or copy audio material and the music industry's loss of revenue due to such technology, the AHRA added Chapter 10, "Digital Audio Recording Devices and Media", to title 17 of the United States Copyright Law. The Act defines a "digital audio recording device" (DARD) as a "machine or device ...the digital recording function of which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private us." Royalties are generated by "the sales of blank CDs and personal audio devices, media centers, satellite radio devices, and car audio systems that have recording capabilities." The royalty compensates featured recording artists and recording copyright owners for the loss of record sales due to the public's use of the aforementioned technology.


The Lawsuit

On July 25, 2014, AARC filed a class action lawsuit for unpaid music royalties against automobile companies Ford and General Motors, as well as electronic manufacturers Denso and Clarion. On November 14, 2014 AARC expanded the suit by filing another complaint against Chrysler and two Mitsubishi Electric companies. The issue at hand is whether devices included in vehicles manufactured by these companies, such as the Ford "Jukebox" and the GM "Hard Drive Device", fall under the definition of a DARD and are subject to the requirements of the AHRA, which includes paying a royalty fee to the Register of Copyrights. AARC claims that these devices fit the definition of a DARD and are subject to the requirements of the AHRA, but since the companies have failed to identify them as such they have not adhered to the requirements of the AHRA and paid the mandatory royalty fees. The defendants argue that while these devices may have copying and recording capabilities, that is neither their primary purpose, nor are they marketed as recording and/or copying devices. Both of these items are requirements for a DARD under the AHRA.

If the court finds that these devices do not qualify as DARDs, their implantation can continue without adherence to the AHRA. If it is found that these devices are DARDs, AARC is seeking various forms of relief, including actual damages for unpaid royalties equivalent to the amount of royalties and a half, plus statutory damages of $2,5000 per DARD "manufactured, imported or distributed by any Defendant" all during the three years prior to the filing of this lawsuit.

In a statement made by the Executive Director of AARC, Linda R Bocchi, Esq., during AARC's latest update of the lawsuit, the organization remains firm in its support of the AHRA and its application to the disputed devices in this case. In reference to the defendants, Ms. Bocchi states that "AARC will not stand by while they refuse to hold up their end of the deal." Unable to reach a settlement, the litigation remains ongoing.



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This page contains a single entry from the blog posted on January 27, 2015 12:28 PM.

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