October 8, 1998: RIAA files application for temporary restraining order to halt Rio sales.
October 16, 1998: Judge issues a temporary order to Diamond Multimedia while she considers the RIAA's application. RIAA was asked to post a $500,00 bond to compensate Diamond for any losses it may accrue as a result in case the court did rule in favor of Diamond. Diamond announces compliance with the temporary order.
October 26, 1998: RIAA's application denied by the judge. The court ruled that Rio does not allow serial copying and so complies with the Audio Home Recording Act (AHRA) but does have to pay royalties as this act stipulates. RIAA files an appeal in response to the ruling.
December 1998: Diamond Multimedia files counter suit against the RIAA claiming that the RIAA is monopolistic and "engaged in anti-trust and illegal business practices 'by conspiring to restrain trade and restrict competition'" (Taylor ). Diamond also sued for libel because the RIAA had claimed that Diamond was connected to piracy of MP3 files.
June 15, 1999: The 9th U.S. Circuit Court of Appeals votes unanimously that the Rio player is not a "'digital audio recording device'" and not subject to the 1992 AHRA. The court found the Rio to be in compliance with federal anti-piracy laws (Taylor).
August 4, 1999: Settlement announced. All parties agreed to support the Secure Digital Music Initiative (SDMI). Diamond joined SDMI saying that this move would protect the rights of artists and copyright holders, as the RIAA wished, and give consumers more freedom, as Diamond wished.
The above information was compiled from the RIAA website as well as news reports by Robert A. Starrett and Phillip Taylor.
RIAA: Above all the RIAA wants to protect its copyrights and claims to want to protect artists (RIAA, MP3). The association claimed that the Rio player "encourages consumers to infringe the rights of artists" by enabling them to download music for which the artist does not receive royalties (Starrett 8). They feared that the Rio would cause more illegal MP3 sites to form asserting that the only reason there is a market for MP3 players such as the Rio is because these illegal sites exist and have "'thousands and thousands of illicit songs'" ready to be downloaded (Starrett 9) (RIAA, Online Piracy).
Diamond Multimedia: Diamond Multimedia's main concern is to give consumers more freedom. They argue that musicians not under contract have the right to distribute their own music as they wish (Starrett 8). The RIAA, they said, wanted to get rid of the Rio so that the its members, the "big five record companies" which are the five largest record companies, may maintain their monopolistic control over the music industry (Starrett 8). The Rio is a threat to the industry because it is an advancement made by the new competition (Starrett 9). Also, Diamond argued that the music on the web is mostly legal citing that over four million legal songs have been downloaded from MP3.com alone (Starrett 10).