The Audio Home Recording Act of 1992 (AHRA) amended the United States copyright law by adding Chapter 10, "Digital Audio Recording Devices and Media". The act enabled the release of recordable digital formats such as Sony's Digital Audio Tape without fear of contributory infringement lawsuits.
The RIAA and music publishers, concerned that consumers' ability to make perfect digital copies of music would destroy the market for audio recordings, had threatened to sue companies and had lobbied Congress to pass legislation imposing mandatory copy protection technology and royalties on devices and media.
The AHRA establishes a number of important precedents in US copyright law that defined the debate between device makers and the content industry for the ensuing two decades. These include: the first government technology mandate in the copyright law, requiring all digital audio recording devices sold, manufactured or imported in the US (excluding professional audio equipment) to include the Serial Copy Management System (SCMS). the first anti-circumvention provisions in copyright law, later applied on a much broader scale by the Digital Millennium Copyright Act. the first government-imposed royalties on devices and media, a portion of which is paid to the record industry directly.
The act also includes blanket protection from infringement actions for private, non-commercial analog audio copying, and for digital audio copies made with certain kinds of digital audio recording technology.
History and legislative background By the late 1980s, several manufacturers were prepared to introduce read/write digital audio formats to the United States. These new formats were a significant improvement over the newly introduced read-only (at the time) digital format of the compact disc, allowing consumers to make perfect, multi-generation copies of digital audio recordings. Most prominent among these formats was Digital Audio Tape (DAT), followed in the early 1990s by Philips' Digital Compact Cassette (DCC) and Sony's Minidisc.
DAT was available as early as 1987 in Japan and Europe, but device manufacturers delayed introducing the format to the United States in the face of opposition from the recording industry. The recording industry, fearing that the ability to make perfect, multi-generation copies would spur widespread copyright infringement and lost sales, had two main points of leverage over device makers. First, consumer electronics manufacturers felt they needed the recording industry's cooperation to induce consumersmany of whom were in the process of replacing their cassettes and records with compact discsto embrace a new music format. Second, device makers feared a lawsuit for contributory copyright infringement.Joel L. McKuin, Home Audio Taping of Copyrighted Works and the Audio Home Recording Act of 1992: A Critical Analysis, 16 Hastings Comm. & Ent. L. J. 311, 321 (1994).
Despite their strong playing hand, the recording industry failed to convince consumer electronics companies to voluntarily adopt copy restriction technology. The recording industry concurrently sought a legislative solution to the perceived threat posed by perfect multi-generation copies, introducing legislation mandating that device makers incorporate copy protection technology as early as 1987.S. 506 (1987), H.R. 1384 (1987), and then S. 2358 (1990). These efforts were defeated by the consumer electronics industry along with songwriters and music publishers, who rejected any solution that did not compensate copyright owners for lost sales due to home taping.S. Rep. No. 102-294 (1992).
The impasse was broken at a meeting in Athens in 1989, when representatives from the recording industry and the consumer electronics industry reached a compromise intended to enable the sale of DAT recorders in the United States. Device manufacturers agreed to include SCMS in all consumer DAT recorders in order to prevent serial copying. The recording industry would independently pursue legislation requiring royalties on digital audio recording devices and media.
A year later the songwriter Sammy Cahn and four music publishers, unhappy with the absence of a royalties provision in the Athens agreement, filed a class action copyright infringement suit against Sony.Cahn v. Sony Corp., No. 90 Civ. 4537 (S.D.N.Y. July 11, 1991). The plaintiffs sought declaratory and injunctive relief that would have prevented the manufacture, importation or distribution of DAT recorders or media in the United States. The suit brought Sony to heel. In July 1991, Sony, as part of larger agreement between the recording industry and consumer electronics makers, agreed to support legislation creating a royalty scheme for digital media. In exchange, Cahn and the publishers agreed to drop the suit.Lewis Kurlantzick & Jacqueline Pennino, The Audio Home Recording Act and the Formation of Copyright Policy, 45 J. Copyright Soc'y U.S.A. 497, 500–01 (1998).
With all the major stakeholders satisfied, the bill easily passed both houses of Congress. President George H. W. Bush signed the AHRA into law in 1992 proclaiming the act "will ensure that American consumers have access to equipment embodying the new digital audio recording technology. It also protects the legitimate rights of our songwriters, performers, and recording companies to be fairly rewarded for their tremendous talent, expertise, and capital investment. This will be accomplished by fairly compensating these artists for the copying of their works and by creating a system that will prevent unfettered copying of digital audio tapes."Statement on Signing the Audio Home Recording Act of 1992, Administration of George Bush: White House Press Release, Oct. 29, 1992.
Devices covered by the AHRA Digital Audio Recording Device defined The AHRA's statutory definitions of "digital audio recording device" and "digital audio recording media" are crucial to understanding the implications of the act. The distinction between covered and non-covered devices or media dictates whether royalties must be paid and whether the SCMS copy control technologies must be included. Notwithstanding more permissive interpretations, the distinction also determines whether noncommercial copying by consumers of digital and analog musical recordings is copyright infringement—to not be considered infringement, the language of the act requires that the copies be made using covered devices and media, regardless of whether the copy control technology is present or the royalty has been paid.
The statutory definition states: A "digital audio recording device" is any machine or device of a type commonly distributed to individuals for use by individuals, whether or not included with or as part of some other machine or device, the digital 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.17 USC § 1001(3).
The definition of "digital audio recording medium" is similar: A "digital audio recording medium" is any material object in a form commonly distributed for use by individuals, that is primarily marketed or most commonly used by consumers for the purpose of making digital audio copied recordings by use of a digital audio recording device.17 USC § 1001(4).
In each case, the principal distinction between what is and is not covered by the AHRA is determined by whether or not the device is marketed or designed (or in the case of media, commonly used by consumers) to make audio recordings, not the device's capabilities. A CD-R recorder included as part of a personal computer would not be a digital audio recording device under the act, since the personal computer was not marketed primarily for making copies of music. The same recorder, sold as a peripheral and marketed for the express purpose of making digital audio recordings, would fall under the act's definition of a recording device.
Today, DART royalties consist of payments made to the US Copyright Office for "blank CDs and personal audio devices, media centers, satellite radio devices, and car audio systems that have recording capabilities", as stated by AARC, who distributes a majority of AHRA funds.
Exceptions The AHRA's definition of "digital audio recording device" includes explicit exceptions for devices that are used primarily to record non-musical sounds (such as dictation devices and answering machines) and for "professional equipment".17 U.S.C. § 1001(3)(A)–(B). The definition of professional equipment was to have been set by the Department of Commerce, though these regulations have never been issued. "Professional" minidisc recorders without SCMS cost thousands of dollars.
The AHRA's definition of "digital audio recording media" explicitly excludes pre-recorded but recordable media, and storage media used primarily to store information other than musical works.17 U.S.C. § 1001(4)(B).
This exception was crucial in RIAA v. Diamond Multimedia Systems, Inc.,180 F.3d 1072 (9th Cir. 1999). the only case in which the AHRA's provisions have been examined by the federal courts. The RIAA filed suit to enjoin the manufacture and distribution of the Rio PMP300, one of the first portable MP3 players, because it did not include the SCMS copy protection required by the act, and Diamond did not intend to pay royalties. The 9th Circuit, affirming the earlier District Court ruling in favor of Diamond Multimedia,29 F. Supp. 2d 624 (C.D. Cal. 1998). ruled that the "digital music recording" for the purposes of the act was not intended to include songs fixed on computer hard drives. The court also held that the Rio was not a digital audio recording device for the purposes of the AHRA, because 1) the Rio reproduced files from computer hard drives, which were specifically exempted from the SCMS and Royalty payments under the act, 2) could not directly record from the radio or other transmissions.
Serial Copy Management System
The AHRA required that all digital audio recording devices conform to a form of copy protection called the Serial Copy Management System or its functional equivalent.17 U.S.C. § 1002(a). A SCMS is a section of code which permits limited copying of an original recording, but prohibits copies from being made by subsequent generations. The AHRA also prohibited circumvention of SCMS and importation, distribution or manufacture of such tools.17 U.S.C. § 1002(c-d). Violations of either provision are punishable by up to $25 per recording, or $2,500 per device.17 U.S.C. § 1009(d).
AHRA royalties
Payment of royalties Under the AHRA, importers and manufacturers pay royalties on "digital audio recording devices" and "digital audio recording media". Those who wish to import, manufacture and distribute must seek a statutory license from the Copyright Office. Royalties are based on "transfer price", either the sale price or the price recorded for customs purposes in the case of importers.
For digital audio recording devices, manufacturers and importers pay a 2% royalty on the device's transfer price, with a minimum royalty of $1 and a maximum of $8 ($12 for dual recorders) per device. For digital audio recording media, manufacturers and importers pay a 3% royalty.
Distribution of royalties Under the AHRA, royalties collected by the Copyright Office on digital recording devices and digital recording media are divided into two separate funds, the Musical Works Fund and the Sound Recordings Fund. One third of the royalties goes to the Musical Works Fund, which splits its cut 50/50 between writers (distributed by ASCAP, BMI, and SESAC) and music publishers (distributed by Harry Fox Agency). These parties receive royalties according to the extent to which their recordings were distributed or broadcast.