Atlantic Records argues that "space-shifting" is illegal.

Electronista.com has a post about a complaint Atlantic Records has filed against the Howell family in Arizona. At first glance, the case appears to be a run of the mill P2P sharing case, but its got an interesting twist: Atlantic Records is arguing that the defendants' act of converting CDs that they had lawfully purchased into the mp3 format for use on their home computer constituted the creation of "un-authorized copies" of their copyrighted recordings.

Electronista notes that this contradicts a stance previously taken by the RIAA on this issue in Grokster, before the Supreme Court, where a representative of the music industry said that, "It's perfectly lawful to take a CD that you've purchased, upload it onto your computer, [and] put it on to your IPOD."

The implications of this argument resonate with a point that was made in our DRM discussion on Monday night, albeit in a slightly different context, in that it shows how the approach being taken by content owners actually penalizes lawful consumers. While in this case, the Howells allegedly did more than just create "unathorized copies," if it is, indeed, illegal to buy a CD and put it on your computer and then onto your IPOD, then why not just download the music illegally in the first place and save yourself the money?

At the same time, from the perspective of the RIAA and other content owners, this would seem like a perfect application for DRM-type protection. Will record companies go back to trying to make CDs "unrippable" or use a system that allows the owner of a CD to rip it once to his computer and put it on his IPOD but NOT allow it to be shared? If they do, how long before the "darknet" responds?