Last week, the U.S. Court of Appeals for the D.C. Circuit issued an opinion in Alliance of Artists and Recording Companies, Inc. v. Denso International America, Inc. et al., 18-7141 (Jan. 28, 2020), clarifying the scope of the Audio Home Recording Act (“AHRA”).
AARC sued Denso, Ford Motor Company, General Motors, LLC, and Clarion Corporation of America alleging their sale of vehicles with hard drives, capable of copying music from CDs and allowing it to be played back in the vehicle from the hard drive (and not from the original CDs), constituted copyright infringement under the AHRA. Congress enacted the AHRA in 1992 to prevent the re-recording of music at home by digital audio recorders that flooded the market in the early 1990s. Under the AHRA, manufacturers of digital audio recorders were required to (1) pay a set royalty to the recording industry; and (2) include systems on their devices to prevent the creation of second generation copies. Any company selling digital audio recorders failing to meet these criteria was liable for copyright infringement, and subject to statutory damages, an injunction, and attorneys’ fees. AARC asserted the hard drives in Defendants’ cars were “digital audio recorders” covered by the AHRA. The district court disagreed, and granted summary judgment in favor of Defendants.
The D.C. Circuit affirmed. Specifically, the Court interpreted the AHRA to apply only to digital audio recorders that solely recorded music, with no other functionality. The accused hard drives, like typical computer hard drives in a car, contained numerous other programs that operated a multitude of functions in the car. The Court also rejected AARC’s “partition theory,” which posited that because music was saved on a specific part of the hard drive, the part of the hard drive that only stored sounds qualified as a “digital audio recorder.” The Court held that for purposes of determining whether a hard drive is a digital musical recorder under the AHRA, the entire hard drive must be assessed. The Court explained that Congress only intended the AHRA to apply to consumer devices designed primarily to digitally reproduce recorded music. Because the hard drives at issue had multiple other uses they were so far removed from the original intent of the AHRA that they fell outside its purview.