FC: Copy protected CD case settled against Music City Records

From: Declan McCullagh (declanat_private)
Date: Fri Feb 22 2002 - 06:46:48 PST

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    From: "Ira P. Rothken" <iraat_private>
    To: <declanat_private>
    Subject: Settlement of Cloqued Music CD Case
    Date: Thu, 21 Feb 2002 23:45:13 -1200
    Organization: Rothken Law Firm
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    We just settled an interesting case involving "cloqued" (Digital Rights 
    Management) music CDs.
    Below I provide information regarding the suit and a summary of the settlement.
    Here is the actual settlement agreement: 
    Ira P. Rothken
    Sunncomm and Music City Records Agree to Resolve Consumer Music CD-
    Cloqueing Law Suit by Providing Better Notice and Enhancing Consumer
    San Rafael, CA February 22, 2002
    Sunncomm and Music City Records agreed today to settle a suit brought
    against them by a California women arising out of Sunncomm s cloquing
    technology used on Music CDs that allegedly acted against the reasonable
    expectations of consumers by electronically tracking consumers listening
    habits and preventing  consumers from spaceshifting songs to portable MP3
    The lawsuit, (entitled DeLise v. Fahrenheit Entertainment, Music City
    Records, and Sunncomm)  was filed in Marin County Superior Court in
    September, 2001 and alleged that Music City Records failed to disclose that
    unlike millions of Music Compact Discs sold before it that Music City's CD
    entitled "Charley Pride - A Tribute to Jim Reeves" would not work on
    standard audio CD players found on millions of personal computers, that
    electronic music files made available for download pursuant to purchase of
    its CD were proprietary in nature, that such electronic music files would
    not work on portable MP3 players, and that the CD included a proprietary
    electronic music scheme that tracked, stored, and disseminated specific
    consumer personal identifying information, listening data, and downloading
    habits to entities beyond the control of the consumer. The suit also alleged
    that there was no practical way to opt-out of the data collection or destroy
    the data once it is collected. The suit requested relief from the Court to
    stop the alleged privacy intrusion and to provide better consumer notices.
    According to the settlement agreement summarized below, the Defendants ,
    Music City Records, Fahrenheit Entertainment, and Sunncomm, agreed to the
    following consumer remedies in the United States so long as they maintain
    the Sunncomm or similar Cloqueing   (Digital Rights Management) technology
    on the music CD entitled Charley Pride a Tribute to Jim Reeves ( Charlie
    Pride CD ):
    1. Defendants shall immediately ensure that any and all Internet music file
    downloads and listening of the music contained or arising out of said
    Charlie Pride CD are always anonymous and personal identifying information
    including, but not limited to, e-mail address and IP addresses shall not be
    required nor obtained as a condition of downloading (including file
    downloads from sunncomm.com) or playing or listening to the CD or music
    files, thereby protecting consumer privacy.
    2. Defendants shall immediately purge all personal identifying information
    (including e-mail addresses and IP addresses) obtained via the music file
    downloading process to date.
    3. Defendants shall amend their privacy policy(s) to advise consumersthat
    all Internet file downloads of the music contained on the Charlie Pride CD
    are anonymous.
    Right of First Sale
    4. Defendants shall not impair or limit in any manner the ability and right
    of consumers to lawfully sell or transfer ownership of the Charlie Pride CD
    to others who shall have the equal ability to download related digital music
    Return Policy
    5. Defendants shall immediately begin accepting from consumers not satisfied
    with the Charlie Pride CD due to problems with playability on their CD
    player, computer CD player, or electronic or portable playing device;
    Platform Notices
    6. Defendants shall include a warning that the Charlie Pride CD is not
    designed to work in DVD players or Computer CD-ROM  players;
    7. Defendants shall include a warning of the minimum system requirements for
    playing the downloadable encrypted digital music files on a computer,
    including Microsoft Windows 98 and above and Microsoft Windows Media Player
    7.0 and above and access to the Internet;
    Spaceshifting Notices
    8. Defendants shall include a warning that the Charlie Pride CD and
    encrypted digital music file downloads are not compatible with MP3 rippers
    and players and are not compatible with MP3 electronic playing devices; .
    9. Defendants shall include a notice to visit a web page with a simple URL
    for an updated list of known compatibility problems related to computers. CD
    players, and digital music playing devices;
    10. Defendants shall include a warning that the downloadable encrypted
    digital music files of the songs contained on the Charlie Pride CD may only
    be downloaded six times.
    I am very satisfied with the settlement we obtained for the benefit of the
    General Public&I applaud Music City and Sunncomm in deciding to resolve this
    case and to give consumers better notice so consumers can make an informed
    decision as to whether they want to purchase such functionally impaired CDs"
    said Karen DeLise plaintiff in the case.
    Sunncomm and Music City, in our
    view, have an obligation if they want to implement Digital Rights Management
    technology on their music CDs to do so responsibly, with notice, so
    consumers can make an informed decision about whether to buy such burdened
    CDs. We are hopeful that this settlement will create a model for other
    record companies to follow if they want to sell functionally inferior music
    CDs by making them different from the millions of CDs sold in the past "
    said Ira Rothken, an attorney representing the Plainitffs.
    If you wish to discuss this case or have any questions please contact
    Plaintiffs lead counsel, Ira Rothken of THE ROTHKEN LAW FIRM at 415-924-4250
    or via e-mail at <mailto:iraat_private>iraat_private The law firm 
    web site is located at
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