Diamond Multimedia, RIAA Settle Lawsuit Over Rio MP3 Player

Computergram International, August 5, 1999

Diamond Multimedia Systems Inc and the Recording Industry Association of America (RIAA) have settled all pending litigation relating to Diamond's Rio portable MP3 player. The Rio plays music downloaded from the internet in the copyright-unprotected MP3 audio compression format. In 1998, RIAA sued Diamond on the grounds that Rio may violate some sections of the Audio Home Recording Act of 1992. The parties now say they have reached a mutually satisfactory resolution. A July 12, 1999 ruling that MP3 merely "space-shifts" music the way a VCR "time-shifts" television shows probably helped RIAA reach its decision to settle. Diamond's enthusiastic participation in RIAA's copyright- protected Secure Digital Music Initiative (SDMI) probably didn't hurt, either.

RIAA executives hinted as much in their press statement on the outcome of the suit. "We filed this lawsuit because it was important to protect the rights of our artists, recording companies and others in the face of a potentially escalating threat from online piracy," explained RIAA senior executive VP and general counsel Cary Sherman. "But even as this case went through the legal system, we worked closely with Diamond Multimedia in the SDMI process... The RIAA and our member companies look forward to focusing our energies on SDMI and other marketplace based efforts that will create the kind of environment in which new consumer electronics products and methods for delivering digital music will flourish, providing consumers with new ways to access the music they want." Always providing that those consumers are prepared to pay.