The Availability of the Fair Use Defense in Music Piracy and Internet Technology

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I. INTRODUCTION

As technology advances, musical artists and the recording industry face new challenges for protecting the copyrights of their works. Much of the new technology is inexpensive and readily available on the Internet, often at the expense of copyright protection. Online stores like Amazon.com or bmgmusicservice.com, musical artist home pages, and unofficial Web sites maintained by fans are some of the newest means through which music aficionados may listen to and purchase music. Unfortunately, despite the large number of legitimate sites over which listeners may listen or purchase music, the majority of Internet music sites are illegitimate, featuring music publicized online without permission from the copyright holder. Moreover, the Internet often leaves the music industry without copyright infringement remedies since Webmasters cannot be located without significant costs and Web users are often too removed from the initial infringement.

Because the recording industry seeks to protect its copyrights from Internet piracy, it also has encountered adversity dealing with companies that produce devices that encourage or simplify piracy. One such device is the Rio PMP 300 (Rio), a hand-held device manufactured by Diamond Multimedia Systems, Inc., which makes portable MP3 files downloadable from the Internet. Although the Rio has no output capability--it is not able to generate copies--it stores music on removable memory cards, which creates another method enabling people to purchase, trade, or obtain pirated music.(1) Because of the Rio's functioning capacity and its lack of certain copyright protection devices, the Recording Industry Association of America (RIAA)(2) filed a lawsuit against Diamond Multimedia in 1998 seeking to enjoin Diamond from selling and distributing the Rio.

This Note examines some of the factors that influence portable MP3 technology, and the MP3 impact on copyright protection and fair use. Part II of this Note discusses the case of Recording Industry Association of America v. Diamond Multimedia Systems, Inc. (Rio),(3) where the RIAA opposed a portable music player manufactured by Diamond Multimedia because the device lacked anticopying mechanisms, and Diamond Multimedia refused to pay royalties to the RIAA from the sale and use of copyright-protected music. Although the court decided the case under the Audio Home Recording Act of 1992 (AHRA),(4) the case involved copyright issues concerning unauthorized copying and payment of royalties. Therefore, for the purpose of this Note, Part II reclassifies Rio as a case falling directly under the Copyright Act of 1976. Part III presents the case as a fair use question and discusses the courts' treatment of the four factors of fair use under section 107 of the Copyright Act. Part IV examines the Rio case under a fair use analysis, focusing on whether the Rio user has a fair use defense in an infringement action by copyright holders. Finally, Part V discusses how the fair use argument could affect the music industry.

II. RECORDING INDUSTRYASSOCIATION OF AMERICA V. DIAMOND MULTIMEDIA SYSTEMS, INC.

Music sound files are readily available online in MPEG 1 Layer 3 (MP3) format, a technology that compresses digital sound files. MP3 has the capability of compressing an audio file by a factor of twelve to one without significantly reducing the sound quality of the music.(5) This is an attractive format for Internet users because it is available for anyone to use, and it permits large amounts of information to be stored on a relatively small amount of computer space. Such ease in locating, distributing, and storing should prompt the music industry to embrace the new technology and expand its sales and marketing methods, but the recording industry has instead been reluctant to market MP3 sales because of the increased potential for music piracy and bootlegging.(6)

Already, the music industry estimates that it loses over five million dollars each year to music piracy(7) because of number of illegitimate Web sites that feature copyright-protected music without the permission of the copyright owner. …