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Ford, General Motors Sued for Unpaid Royalties

The Alliance of Artists and Recording Companies — which represents artists’ and recording companies’ interests within the digital duplication sector (think blank CDs and “digital jukeboxes”) — has brought a suit in Washington, D.C., against two major automobile companies, Ford and GM, as well as two technology companies, Denso and Clarion, over unpaid royalties related to the Audio Home Recording Act. (The AARC was created to oversee administration and enforcement related to the AHRA.)

The suit brought by AARC alleges that Ford and General Motors, via the technology companies Clarion and Denso respectively, have failed to register their in-vehicle media duplication devices, which AARC stresses are subject to the royalties mandated by the AHRA. Both companies’ devices offer the same functionality — to store a CD’s audio on a hard drive for later playback, as well as apply identification information from Gracenote (artist, album and song titles, etc.) for the stored recordings. You can read the complaint in full here.

AARC seeks an injunction against the four companies for sale and distribution of the devices, statutory damages of $2,500 per device for three years up to the filing of the lawsuit, all royalties that would have been normally owed by the companies in the three years prior plus 50 percent, and attorneys’ fees.

The Audio Home Recording Act was signed into law by George H.W. Bush in 1992 in order to address the (at the time) new developments in digital replication, which allowed companies and fans to create one-to-one copies of recordings. The crux of the legislation was to introduce a statutory royalty for manufacturers of digital copying technologies and devices to pay in order to avoid a spiderweb of litigation by songwriters and trade bodies over their usage. The law also featured provisions for end users’ ability to use these technologies for their personal use, such as making a backup copy of an album they had purchased.

“While no one likes litigation,” said AARC executive director Linda Bocchi in a statement, “Ford, GM, Denso, and Clarion have stonewalled long enough, and we are determined to collect the royalties our members — and all artists and music creators with rights under the AHRA — are owed.”

Neither Ford nor General Motors immediately responded to a request for comment.