Milberg Weiss Files Suit Over CDs With No-Copy Technology

Milberg Weiss Bershad Hynes & Lerach has jumped into the legal brawl over how much access consumers should have to copyrighted digital music. Best known as a leader in shareholder class actions, Milberg Weiss filed a California consumer class action in Los Angeles on Wednesday against five record labels claiming that the audio discs they are selling with no-copy technology are misleading and defective.

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Milberg Weiss Bershad Hynes & Lerach has jumped into the legal brawl over how much access consumers should have to copyrighted digital music. Best known as a leader in shareholder class actions, New York-based Milberg Weiss filed a California consumer class action against five record labels Wednesday claiming that the audio discs they are selling with no-copy technology are misleading and defective. In Dickey v. Universal Music Group, 275602, filed in Los Angeles Superior Court, Milberg Weiss requests that the defendants be enjoined from selling the compact discs and ordered to refund or replace them and/or label the products as inferior to standard CDs. The record labels “conspired and agreed among themselves to sell defective audio discs which were rendered unreproducible [sic] or unstable for use in many personal computers,” the complaint states. “By selling these inferior quality audio discs, defendants are attempting to curb the public’s exercise of their right to play, backup, space-shift and time-shift their own music to other playback mediums.” Milberg Weiss’ William Lerach and Darren Robbins did not return calls Friday. Nicholas Koluncich III, a solo practitioner in Albuquerque, N.M., who is working with Milberg Weiss on the case, said the record companies also are misleading consumers. “These non-record discs are misrepresented as compact discs, which they are not,” he said. “They have poorer sound and quality” and built-in errors that cause computer problems. Koluncich said he learned about the defective discs from his sister, Elizabeth Koluncich, who is one of the plaintiffs in the case. The Recording Industry Association of America countered that record labels have the right to protect their property from theft. “With this frivolous action, the plaintiffs’ bar has sunk to a new low, filing a lawsuit over practices that most U.S. companies have not even engaged in so that they can stake out their claim to class action attorneys fees,” RIAA president Cary Sherman said in a statement. Koluncich said no one knows how many of the altered discs are on the market. According to the complaint, Midbar Technology — an Israeli company that provides copy-protection technology — has said more than 10 million discs with no-copy technology have been sold. The RIAA said it is aware of only three CDs that have been commercially released in the United States that use copy-protection technology: “More Fast and Furious,” the soundtrack to “The Fast and the Furious;” “A Tribute to Jim Reeves” by Charley Pride; and “Serenatas” by Los Toros Band. Consumers apparently have figured out ways to get around Sony Music’s protection technology. News publications recently reported that by tracing the rim of a disc with a felt tip marker consumers were able to copy the music. Fred von Lohmann, senior IP attorney at the Electronic Frontier Foundation, said the advent of copy-protection technology would lead to further legal battles with respect to the Digital Millennium Copyright Act. The 1998 law prohibits the use of technology to circumvent copy-protection devices. “Magic marker manufacturers aren’t worried,” von Lohmann said. “But people who distribute CD copying software and CD burners are probably getting expensive legal advice regarding the DMCA.” The battle over copyright protection in the Internet era is far from over. The entertainment industries, electronics and computer companies, consumer groups and Congress are fighting over how much protection is adequate. Sen. Ernest Hollings, D-S.C., introduced a bill in March that would require the manufacturers of computers, television sets, cable boxes and other digital media devices to incorporate technology in their products to prevent illegal copying or redistribution. The Consumer Broadband and Digital Television Promotion Act calls on manufacturers to work with content industries to develop standards and technologies to protect digital content. Earlier this month the motion picture studios proposed implementation of a “broadcast flag” that would mark digital TV broadcasts and prevent them from being copied and retransmitted. Consumer electronics groups and others rejected the proposal. Milberg Weiss is familiar with the debate over copyright and digital music. It had a brief role in litigation against Napster Inc., coming in as co-counsel in a class action brought on behalf of independent artists. The plaintiffs, who claimed their music was being traded through Napster’s file-swapping service without their consent, failed to obtain class certification.

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