The Recording Industry Association of America has lost its bid for a preliminary injunction against Diamond Multimedia’s Rio device, which can download MP3 music files from a PC to a memory card inside the device for playback. The group had argued that Rio violates the Home Recording Act.

In response to RIAA objections, however, Sony Electronics and Creative Labs, which also plan to market the devices, are working to implement technology that will prevent mass reproduction of copyrighted music. “MP4 has a watermarking technology… that can stop a second copy from being made or disable the fidelity function to stop an exact duplicate from being made,” says Micah Stroud, Creative’s audio product marketing manager.

In addition to objecting to the MP3 and MP4 devices, RIAA also wants copyright protection built into CD-R and CD-RW drives to block the duplication of music CDs. “Does CD-R worry us?” asks, Cary Sherman, RIAA senior executive VP and general counsel. “Of course. Not just because of the home copying, but because it is creating a generation of entrepreneurial pirates. A person used to need a factory to do this. Now all that’s needed is a table and computer.”

((c) Computer Retail Week)