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Music biz drops effort to block MP3 Rio

'Net portable player does not violate piracy laws

SAN FRANCISCO — Recording industry execs threw in the towel Wednesday on all litigation over the Rio portable MP3 Internet music player, which a federal court has ruled does not violate anti-piracy laws.

In a joint statement, the Recording Industry Assn. of America, the Alliance of Artists and Recording Cos. and Diamond Multimedia Systems, the maker of the Rio, said they had reached “mutually satisfactory resolution of outstanding legal issues.”

Announcement marked a formal end to months of litigation over the Rio, one of a new breed of portable, pager-sized Internet music players that can download and play CD-quality songs encoded in the MP3 format.

Sensing a potential threat of music piracy, recording industry execs asked the courts to issue an injunction barring sales of the device. This was denied, and the companies appealed. In June, a federal appeals court in San Francisco killed all hope for blocking the Rio when it ruled that the device was not primarily a recorder and thus was not subject to 1992 federal anti-piracy laws.

Meanwhile, MP3 player manufacturers and the recording industry have cooperated in developing the Secure Digital Music Initiative (SDMI) to establish guidelines for Internet music formats and devices by the end of the year.

“The RIAA is also pleased to bring a formal end to this legal process,” Cary Sherman, senior exec VP and general counsel of the RIAA, said in a prepared statement. “Today’s announcement makes clear that the future of the digital music marketplace will be created in the marketplace itself, enabled by initiatives like SDMI.”

AARC Executive Director Linda Bocchi said the cooperation would promote “the development of a legitimate online music market.”

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