Ford and General Motors Unusual Defendants in Music Unpaid Royalties Lawsuit from Alliance of Artists and Recording Companies

Normally when you hear the terms "unpaid royalties" and "music" in the same sentence, you assume it must be another beef between music publishers and streaming services. This week however, it's a battle between two of the world's largest automotive companies and the Alliance of Artists and Recording Companies. The latter is suing both General Motors and the Ford company for unpaid royalties resulting from digital duplication.

"Say what?" say you. Indeed, there's a good chance that the new vehicle you bought from either of the automotive giants has the capability for digital duplication, a term used to describe the transfer of copyrighted material to blank CD's and other formats. Many new vehicles feature the ability to store music from a CD to a small hard drive for later listening, much like how iTunes can save compressed audio files from the discs you place in your computer.

Under the Audio Home Recording Act, producers of blank CD's and any product designed with the purpose of storing music must pay a statutory royalty rate to cover the due royalties of theoretically transferring copyrighted material. The AARC's lawsuit includes Clarion and Denso—the tech companies that provide the technology to Ford and GM—and technically the brunt of the allegations should fall on those companies for not paying the statutory royalties for their products.

Although that cost should have been carried over to buyers Ford and GM, the AARC are suggesting that the automotive superpowers were actually working in cahoots with Clarion and Denso. It's tough to blame the AARC for targeting the two carmakers: Those two have money that the audio companies just don't have. And the AARC is looking to milk quite a bit from the lawsuit: up to $2,500 per device for the last three years of production, all the royalties that should have been paid plus 50 percent and attorneys' fees. In addition, the association is looking to have an injunction filed against the four defendant companies for the sale and distribution of the named devices.