Court Says Diamond Can Sell MP3 Device

Diamond Multimedia Systems Inc. can’t be blocked from selling its Rio portable MP3 music players, a federal appellate court ruled.

The U.S. 9th Circuit Court of Appeals upheld a lower court ruling denying the Recording Industry Assn. of America’s motion to stop the sale of the players, which the trade group claims are used by Internet music bootleggers.

The decision turned on whether the cigarette-box-sized devices that play songs copied into so-called MP3 computer files are subject to restrictions under the Audio Home Recording Act of 1992. The court ruled that the Rio is not subject to the restrictions, partly because it’s made for personal, noncommercial use of musical recordings.

The trade group’s “interpretation of the statutory language initially seems plausible, but closer analysis reveals that it is contrary to the [language] and common sense,” the San Francisco-based appellate panel ruled.

The association, whose members include the five biggest music companies, criticized the ruling in a statement. It declined to comment on the possibility of a further appeal, which would go to the U.S. Supreme Court.

“The court appears to have concluded that, despite congressional intent, [the act] has limited application in a world of convergent technologies,” the group’s statement said.