The Alliance of Artists and Recording Companies—a nonprofit group—has initiated a federal copyright infringement lawsuit against Ford and General Motors targeting the automakers’ in-car hard drive-based CD ripping technology. The lawsuit (full text) alleges that Ford and GM’s devices fail to comply with the terms of the Audio Home Recording Act of 1992 and that the AARC is due "injunctive relief and damages" because of that alleged noncompliance.

The problem with the suit, as outlined in a scathing response from Techdirt, is that the Audio Home Recording Act of 1992 was specifically written to allow exactly the kind of personal copying that in-car CD-ripping audio units perform. This was further cemented in 1999 with the 9th US Circuit Court of Appeal’s RIAA v. Diamond Multimedia Systems decision, which threw the weight of judicial precedent behind the notion that devices designed to make copies of copyrighted audio for personal use (as opposed to serial copies for distribution) are legal and exempt from licensing fees.

With its July 25 suit, the AARC alleges that Ford’s in-car "Jukebox" feature and GM’s in-car "Hard Drive Device" are purpose-built "Digital Audio Recording Devices" and therefore are subject to lots of additional regulation. Specifically, the suit states that both Ford’s Jukebox and GM’s Hard Drive Device fail to implement the Serial Copy Management System copy protection scheme and that both Ford and GM have failed to pay the appropriate AHRA-mandated royalties on their devices.

The fulcrum of the group's argument rests on the specific designation of the in-car devices as music-only systems. As pointed out by Techdirt, the suit bases this allegation on things like a marketing claim by GM that "the hard drive will not accept photos or other sorts of data" and is only usable for ripped audio. The AHRA does indeed regulate and levy royalties on devices intended to copy audio—but only if those devices are intended to be used to make repeated copies. In RIAA v. Diamond, the 9th Circuit affirmed that devices designed to make copies for personal use only aren’t impacted by the AHRA’s restrictions—including the requirement for SCMS and royalties.

The AARC is hoping to receive injunctions barring the sales of the two offending in-car devices, damages equal to the royalties that Ford and GM would have had to pay under the AHRA, additional damages of 50 percent of the actual damages (this round of money would be paid to the Register of Copyrights), statutory damages of $2,500 for each in-car device sold, and "pre- and post-judgement interest" attorney fees. The AARC also wants a statement from Ford and GM acknowledging that their devices violate the AHRA.