The music industry ain't what it used to be. The days of dastardly contracts, ruthless chart dominance, and many, many dollars are gone, thanks to the internet and the industry's stubborn unwillingness to adapt to it.
The only things that remain the same are (a) the music industry's greed and (b) its litigiousness. (The two are probably related.) As proof, ArsTechnica reports that the music industry's de facto collections department for royalties is suing Ford and General Motors, claiming that the automakers have "refused to pay the royalties that Congress has determined they owe for the [audio] recording devices they manufacture, import, and/or distribute".
Way back in 1992 -- when Nirvana ruled the airwaves and Guns N' Roses was still marginally relevant -- the US Congress passed the Audio Home Recording Act. Among other things, the Act made it perfectly clear that members of the public could make analog, non-commercial audio recordings from radio and other sources without violating any copyright laws or acquiring the express, written consent of Major League Baseball.
The Act also required makers of digital recording devices and media to devise systems of copyright protection, and it levied royalties on that equipment, which -- unlike analog equipment -- could be used to make perfect copies of media. The creators of blank CDs, CD burners, and the like paid those royalties to the music industry via a newly formed nonprofit called the Alliance of Artists and Recording Companies. The royalties were distributed to labels and artists in compensation for the sales they just knew they were losing because of bootlegging and all.
The Audio Home Recording Act is still in effect, enhanced by the later Digital Millennium Copyright Act. The Alliance of Artists and Recording Companies, or AARC, is still here, too. And it wants Ford and General Motors (plus two of their suppliers, Clarion and Denso) to pony up for three years' worth of unpaid royalties.
Why should Ford and GM pay those royalties? Because AARC says that Ford's "Jukebox" GM’s "Hard Drive Device" can rip/save audio files to a hard drive and that neither of those devices uses copyright protection software. As compensation, AARC seeks:
1. Permanent injunctions against the sale of either the "Jukebox" or "Hard Drive Device" without related royalty payments.
2. Payment of outstanding royalties that have accrued during the past three years, plus damages equal to 50 percent of that total (in other words, if we're reading this correctly, 150 percent of royalties owed).
3. A penalty payment "equal to $2,500 per [digital audio recording device] manufactured, imported, or distributed by any Defendant during the three years immediately prior to the filing of this Complaint and from the date of filing until the date of judgment, to be paid to the Register of Copyrights".
4. Attorney's fees.
Who's gonna win?
We're not lawyers -- much less copyright lawyers -- so our take on this matter probably doesn't carry much weight.
However, we do know that a similar suit was filed in 1999 called RIAA v. Diamond. That case was brought by the Recording Industry Association of America, which argued that Diamond Multimedia owed royalties under the Audio Home Recording Act. Why? Because Diamond's Rio digital audio player (remember those?) could record and play digital audio files but didn't use copyright protection software.
The 9th Circuit Court of Appeals, however, served RIAA a big ol' smackdown. The court decided that the Rio was not and could not be covered by the Act because the Rio has no way of copying or redistributing files that are ripped to its hard drive. In other words, it is solely a personal, non-commercial device.
That's likely to be the same argument that Ford and GM make, since their in-car devices aren't designed to facilitate copying or commercial distribution. They are, in a sense, bigger, costlier versions of the Rio. (Sorry if that sounds insulting, Ford/GM owners.)
Will Ford and GM prevail? Again, we can't say, but precedent seems to weigh in their favor. Not that that's likely to stop the bull-headed folks in the music industry, who can be as tone-deaf on these matters as certain un-AutoTuned pop stars.
For a much more detailed takedown of AARC's claims, check out this article at TechDirt.