MP3 Players & Product Liability

In our last edition I had some good news for resellers (see ‘Chipping at the mod-chip case' in CRN 184, 31 October, page 43).

In this edition of Legal View I am pleased to bring resellers some more good news. While this article is particularly relevant to resellers in the business of selling MP3 players and other portable media devices, it is relevant to all resellers. This article is about product liability.

Copyright issues with MP3 players Unlike in the United States and other jurisdictions where copyright laws allow individuals to make copies of music, video and other materials for “personal use”, Australian law only permits the reproduction of copyrighted materials if authorised by the copyright owner or where the reproduction is for the purposes of research, study or for other limited purposes. As a result, subject to certain exceptions, the act of format shifting music and other media in Australia from one device to another, for example, where music files are transferred from a computer hard drive to an MP3 player, is a direct breach of Australian law.

As a reseller, it is important that you do not sell illegal products or are seen to authorise others to use your products for illegal purposes. Resellers who do so may in fact be exposing themselves to liability. Fortunately, MP3 players and similar format shifting devices are unlikely to be seen as illegal products for the following reasons:

1. Resellers can have some comfort in the fact that Apple has, after many months of anticipation, finally opened its iTunes Music Store in Australia. As a result of the licensed music now available through the iTunes Music Store, Australian resellers now have a legitimate, lawful sales point on which to market compatible MP3 players and other portable media devices.
2. The Attorney-General is currently in the process of reviewing Australia's copyright regime. At the core of the debate is the issue of whether a “fair use” exception should be incorporated into Australia's copyright laws to make reproduction for personal use permissible.

Defective iPod nano screens

In other iPod-related legal news, a class action lawsuit was recently launched against Apple in the United States over its easily scratched iPod nano screens. The complaint was filed in the United States District Court in San Jose, California. Resellers can be comforted that it is the manufacturer being sued and not the reseller in this case.

Defective products generally

The importance of product liability cannot be and should not be underestimated. As a reseller, you should ensure that you have in place robust agreements that protect yourself from being sued for selling faulty or defective products. Effective disclaimers and terms of sale are also essential.

Some important questions that resellers should ask themselves before selling or marketing products include:

* Are the products of a merchantable quality?

* Are the products fit for the purpose for which they are supplied?

* Is my advertising misleading or deceptive?

The exposure of resellers to legal liability is an issue that should be given appropriate attention at all times. Proactiveness in this area at the earliest possible point in time is recommended to avoid the hassles and costs associated with dealing with these issues after they surface and explode.

NB. This column is for general informational purposes only. It is not legal advice nor is it a substitute for legal advice. Readers should seek legal advice on their particular circumstances.

Alan Arnott is a technology lawyer with qualifications in computer science and law and is an associate of Arnotts Lawyers in Sydney. He can be contacted on (02) 9419 6355 or via email at alan@arnotts.net.au . Efficient, responsive and cost effective legal services. Contact Arnotts Lawyers for urgent assistance on: Telephone: +61(0)2 9419 6355 Facsimile: +61(0)2 9419 8795 E-mail: info@arnotts.net.au Postal: 1st floor, 9/22 Thomas Street, Chatswood New South Wales 2067 Australia DX: DX 29602 CHATSWOOD