GM Car Infotainment Systems ‘Fail’ AHRA Test, Supplier Denso Argues

Chrysler, Ford and GM and their respective suppliers Mitsubishi, Clarion and Denso violated the AHRA because they shipped car infotainment systems with CD-copying hard drives without building the Serial Copy Management System into the devices or paying the Copyright Office the required 2 percent royalty on the wholesale price of the hardware, the Alliance of Artists and Recording Companies alleged in separate lawsuits filed in July and November that have since been combined (see 1410140084).

But Congress enacted AHRA in 1992 to “regulate the use of certain digital audio recording technologies, such as CD burners, that enable users to create numerous commercial-quality copies of a music recording without the copyright owner’s permission,” Denso said in its motion. “In a declining music market,” the lawsuit is an "effort" by AARC “to bolster its royalty collection activities” by seeking to expand AHRA’s scope to include vehicle navigation and entertainment systems, Denso said.

However, “a navigation system with added capability for an automobile owner to store a personal music playlist for listening in her car is a far cry from what Congress sought to regulate under the AHRA,” Denso said. “The plain text” of AHRA “demonstrates that a device does not qualify for regulation” unless it is a DARD, it said. “The mere ability to copy is not enough to qualify as a DARD. The AHRA does not require royalty payments on any kind of device that can be used to copy in a digital format, but instead regulates only particular devices. To be a DARD, a device must be capable of making copies on material objects on which are fixed only sounds and material incidental to those sounds, and which do not contain any unrelated computer programs.”

The systems that Denso supplies GM “fail both of these requirements,” Denso said. “They are not DARDs because, as the undisputed material facts show, such systems record music only to a self-contained hard drive, which also includes navigation (and other unrelated) computer programs.” That’s why the court should grant Denso’s motion for summary judgment dismissing the AARC litigation, it said.

The motion relies heavily on a 17-page declaration by Akihiro Ogasawara, a project manager in Denso’s R&D division. Ogasawara, a 24-year Denso veteran, has been “primarily responsible for the design” of car infotainment systems supplied to GM since 1998, his declaration said. The declaration was partially redacted to hide “valuable hardware schematics and other competitively sensitive information not known to the public,” the disclosure of which “would be harmful” to Denso, his declaration said.

From the first Denso infotainment system sold to GM, a standard hard drive “and related software for recording” to that hard drive were included with all the systems shipped, Ogasawara said. All systems shipped to GM also have included “both a navigation system and basic entertainment system functionality,” he said. Contrary to AARC’s complaint, no Denso infotainment systems have been supplied to GM in the U.S. “without a navigation system” built in, he said.

Once a user records music from a CD onto the system’s hard drive, the “sole outputs” for audiobook or music files stored on the hard drive are for the automobile’s speakers or for connecting headphones, Ogasawara said. There are “no other means” of output, he said. The system “does not allow any of the recorded content” on the hard drive to be copied from the hard drive “to another device,” he said. Denso also uses “a proprietary playback format for music data recorded from a music CD, he said. So “even if it were possible to duplicate the files from the HDD [hybrid hard drive] (which it is not), such copies could not be used with any other kind of playback device,” he said. “To the extent used with pre-recorded music at all, the recording capability can only be used by the car owner to create personal playlists from her music collection for use in her car, and not for any other purpose.”