Summary: The RIAA Brought Suit Against Diamond Multimedia Systems, Inc.

The RIAA brought suit against Diamond Multimedia Systems, Inc., (Diamond), "alleging that the Rio (a device manufactured by Diamond) does not meet the requirements for digital audio recording devices under the Audio Home Recording Act of 1992. The Rio is a portable digital audio device which "allows a user to download MP3 audio files from a computer and to listen to them elsewhere." The lower court denied the RIAA's request for injunctive relief, holding that the RIAA had failed to demonstrate a likelihood of success on the merits, and the RIAA appealed. On appeal, the ninth circuit upheld the lower court's decision to deny injunctive relief but found that the lower court had erred in holding that the Rio was a covered device under the

First, a digital audio recording device must employ a Serial Copyright Management System ("SCMS") that sends, receives, and acts upon information about the generation and copyright status of the files that it plays. Second, any person importing, distributing, or manufacturing a digital audio recording device must pay a two percent royalty for each device sold to the Register of Copyrights on behalf of the copyright holders. To be subject to the AHRA, a device must be a "digital audio recording device," which the AHRA defines through a set of nested definitions. The AHRA first defines a "digital audio recording device" as "any machine or device of a type commonly distributed to individuals for use by individuals ... the recording function of which is designed or marketed for the primary purpose of, and that is capable of, making a digital audio copied recording for private use. A "digital audio copied recording" is defined as "a reproduction in a digital recording format of a digital musical recording, whether that reproduction is made directly from another Digital musical recording or indirectly from a