Diamond gets rough by filing RIAA countersuit
Org accused of thwarting sales
The counterclaim, filed Tuesday in U.S. District Court in L.A., was submitted along with Diamond's answer to the lawsuit filed against it on Oct. 8 by the RIAA.
Illegal copying
The trade org has claimed the Rio device encourages illegal copying of music downloaded from the Internet and thwarts the potential of the legitimate, growing marketplace for the downloading of music.
The RIAA also claimed the handheld device violated the 1992 Audio Home Recording Act. The act mandates manufacturers of certain digital copying devices to have anti-copying measures built in.
Diamond's response denied all of the allegations, and it added counterclaims for violations of state and federal antitrust laws and unlawful business practices under California law.
Intentional misconduct
Under the antitrust claims, the suit also asks for treble and punitive damages for intentional misconduct aimed at injuring Diamond.
The latter stems from the RIAA's seeking, and initially obtaining, a restraining order against Diamond that blocked the shipping and sales of the device while the court prepared to hear arguments from both sides. The court later rescinded the restraining order.
"Diamond's counterclaims allege that the lawsuit against Diamond is a product of a conspiracy between the RIAA and others to restrain trade and restrict competition among manufacturers in portable MP3 devices and has, in fact, damaged Diamond's profitability and credibility in a new market area," said Andrew Bridges, attorney for Diamond Multimedia.
Legitimate market
Bridges said Diamond "responded to the RIAA's concerns and incorporated a Serial Copy Management System into the Rio, even though it was not required to do so" and that the "RIAA's continued pursuit of this lawsuit, in light of Diamond's incorporation of SCMS into the Rio, makes clear that RIAA's real goal is stopping the legitimate MP3 market."
Bridges said statements by RIAA CEO Hilary Rosen, "as well as other reckless statements made by top RIAA officials without regard for the truth, has injured Diamond's reputation."
In an unusual twist, Diamond Multimedia also claims the Audio Home Recording Act is void because it "violates the First and Fifth Amendments to the U.S. Constitution... Music is a form of expression, and its communication is protected by the free speech guarantees in the First Amendment to the United States Constitution," said Bridges.
The RIAA called Diamond's claims "preposterous and irresponsible and a transparent ploy to gain publicity for the Rio device in time for holiday sales."
