Ford and GM are Sued for Devices that Enable Music Copying

The Alliance of Artists & Recording Companies has filed a lawsuit against Ford, General Motors and two tech companies that made devices for digitally copying music from CDs to hard drives. The lawsuit is based on the 1992 Audio Home Recording Act, which provides royalties to record companies from the sale of music copying devices. The Alliance contends that Ford and GM installed these devices without paying any royalties, and is now seeking unpaid royalties and damages.

musicThe car companies, Ford and GM, and the technology companies, Denso and Clarion, are accused of failing to register and pay the royalties from the sale of their in-car CD-to-hardware music copying devices.

The Alliance of Artists & Recording Companies is seeking $2,500 in damages from the defendants for every installed music device. In addition, the record companies want the unpaid royalties plus 50 percent, and attorneys’ fees.

However, recording companies may not get the damages because the Audio Home Recording Act now covers very few devices. There were many exemptions to the law because tech companies wanted to protect PCs from royalty restrictions. According to Businessweek, “In 1999, a federal court effectively neutered the law by ruling that devices that copied music to hard drives weren’t covered under it.”

Apple, which came out with one of the most famous music copying devices, never paid royalties from the sales of the iPod. “This is just an iPod built into a car, and the iPod isn’t regulated, so it’s silly to claim that this car audio system is regulated,” said Bill Herman, author of The Fight Over Digital Rights.

“If GM is actually on the hook for $2,500 per device, then Apple owes them roughly the GDP of a small country,” he added.