According to the quotes posted by RealityChuck, as soon as you make a copy of the CD, in your very first step there. The law says you’re not allowed to reproduce the copyrighted material, and making an MP3 is reproducing the copyrighted material.
Now, you almost certainly won’t get in trouble at all in your hypothetical scenario, because the laws aren’t enforced that strictly. But they could be.
That would be acceptable, but unless the CDs were recorded prior to 1924, they’d probably still be under copyright. There may be some recordings between 1924 and 1960 whose copyrights were allowed to lapse, too, but it’d be hard to make that determination.
Let us visit THIS web site to try to clarify the matter.
"Legal vs. Constitutional Rights
You have legal rights, and you have constitutional rights. The difference between the two is that a legal right can be changed or taken away, while a constitutional right can’t (short of a constitutional amendment).
In the areas we are concerned with, in general, the fair use rights that exist are legal, not constitutional rights. Certain specific actions are called OK by a specific provision of the law. Congress can giveth, and Congress can taketh away.
This can also work the other way, too. Copyright owners get certain rights, not absolute rights. If they can’t show that some use seriously hurts the rights they do have, the courts are unlikely to prevent that use.
**I Have The Constitutional Right to Make A Copy! **
You don’t, though it’s understandable why you might think that."
(bolding mine)
There is a critical ambiguity in the law, at least so far. The question of whether a person who buys a CD can make a single archival copy is still at least somewhat open. My view, and obviously Chuck’s, as well as I’d say the strong majority of scholars who have commented on the issue, is that such an archive is illegal, but until a critical mass of courts (or the U.S. Supreme Court) addresses the question directly, or until Congress passes new legislation clarifying the issue, it is as yet undecided. I don’t believe anything like this has happened, but it’s only a matter of time, probably.
However, that ultimately doesn’t impact on the OP, because even if personal archives are legal to make (and as noted I think they aren’t), they are illegal to sell. The point of an archive, to the extent they are legitimate, is to protect the already-made investment of the original consumer. Selling an archive takes a potential sale out of the pocket of the copyright holder – that’s a whole different kettle of fish. And is clearly illegal.
Of course, even though the legality of archives might be in question, note that the way the issue will likely be determined is if somebody who made archives is sued, and “I didn’t know it was illegal” is not typically a defense.
–Cliffy
OK, clear enough. Still a bit confused on one point re. archiving though, section 117 appears to explicity allow archival copies of “Computer Programs”. The definition of a computer program appears to be something like: a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.
If I use my computer to play a audio CD or a DVD how is this not a set of instructions being used indirectly in order to have a multi-media result? I’m guessing here that this must be false in some way, otherwise 117 would, by extrapolation, allow an archival copy of an audio disc or DVD.
(This is off the OP I realise… any right to make an archival copy != right to sell same).
I carefully avoided addressing this point in my last post because I don’t know the answer. 
I feel confident that a music CD isn’t a computer program, although I need to think much more carefully about the issue before I develop consistent rationale. My off-the-cuff response is that the “set of instructions” is the program that teaches your computer how to read the data off the CD, not the data itself. While the phrase taken alone is ambiguous, it needs to be read in the context of which it was passed. When this section was rewritten (in 1980, according to my copy of the Act), there already were word-processing programs that could store and display text. The “program” has always been understood to be the thing that does the work, not the text displayed, not the picture created, not the sounds synthesized. I don’t think there’s really a better answer to your question than “That’s what everybody understands it to mean,” coupled with “Congress couldn’t have possibly meant it to mean what Apollyon suggests, as then Sec. 117 – which purports to merely be about computer software – makes a sweeping and dramatic change in the ability of people to copy anything as long as they can first figure out how to get a computer to display or produce it.” This is a consistent problem with using language, imprecise as it is, to attempt to describe complex legal or technical (in this case both) concepts.
While I think you wouldn’t get laughed out of court with such an argument, I also don’t think you’d have any great chance of winning on it.
–Cliffy
German Copy Right:
Paragraph 53
I’ll translate the relevant part: "It is allowed to produce or to let someone produce single copies of an item (note: This is a shoddy translation on my part, but I can’t recall what “Werk” would be. Perhaps “work”?) , if
2. the copy is meant for a personal archive, the copy of the item is made for that purpose and if the source of the copy is an original you own (note: A word by word translation of that last part would be slightly different, but I chose to translate the gist rather than single words).
It’s interesting that you are actually allowed to make a copy of a book, where you don’t own the original to, if you are copying it by hand.
And you are allowed to make a copy of an item, of which you don’t own the original, if it’s for other personal use and it is out of print for at least 2 years.
Producing and selling copies commercially isn’t allowed in any case though.
(Understanding that this was off the cuff – and thanking you for the answer…)
That does seem reasonable until one looks at how a lot of software works. Take a game like Quake or Doom. There is the main program that tells the computer what to do (much like the word processor example), then there are files of pure data that tell the main program how to make things look (textures and the like), and others that tell the main program where to put things (map files), or what to display (files of text). There can also be background images (gifs, jpgs), and music files.
Taking the strictest interpretation of your (off the cuff) response, section 117 would only allow me to make an archival copy of the main program but not the maps, textures, text, pictures or music – which would rather defeat the purpose of the archive copy.
Having blurred the line then (assuming you accept my logic), what makes the music file shipped on my Quake CD different from the music file shipped on my Pogues CD? Or the mpeg cut-scene in my game different from a DVD format movie? (DMCA and de-CSS notwithstanding). 
Better then than an “I didn’t know the law” defence.
Optihut: ‘Werk’ is indeed work. You appear to mistranslate the second section: it says roughly "copy is meant for inclusion/storage in your own archive, if and insofar the reproduction is necessary for this purpose and is used as a ‘Vorlage’ for the reproduction of a work of your own. Vorlage means model, draft, outline, template. I’m guessing they mean the practice of (for example) artists copying famous paintings to learn themselves how to draw.
I don’t see the restriction to ‘copying by hand’, but maybe I’m overlooking something.
You should furthermore note that there is nothing strange about the last part of these restrictions. It says that you are allowed to copy small parts (4.a.), or a full work only if it cannot be obtained in another way. The first bit is probably for the most part covered by fair use in the U.S., the second bit is probably found to be justified since you do want to pay for a copy of the public work, but the publisher does not find it commercially viable to issue a new printing. With respect to the first part you should remember that every time you make annotations of a work you are studying you are in effect copying small pieces of the work. If that would be prohibited most scientific work in the humanities would come to a standstill.
Dutch Copyright law has rather similar restrictions, that’s where my interpretation is influenced by.
Apollyon: you mention a very interesting question which has been a pet peeve of mine for a while. Indeed most copyright law seems to assume easy distinctions that often cannot be made in practice. It deserves more attention than it is given. Cliffy’s response (“I don’t know the answer :)”) is correct in giving the current state of affairs. I’ve given the matter some thought but it is really hard to find a good way of demarcating things. What do you think, for example, of shareware? In that case you get the program but only with a limited license, and after paying you get a full license but without a program: you only receive a key. Are you allowed to make a copy?
That part kinda threw me off. Reproduction is never really necessary, so I chose to interpret that line slightly different.
It’s very possible that I was wrong on it, granted.
That’s where you are wrong, though: The text reads “als Vorlage für die Vervielfältigung ein eigenes Werkstück benutzt wird,”
It’s one of those moments where I know exactly what it means - being a german native speaker and all - but can’t find adequate words for a translation. The whole part “Vorlage für die Verfielfältigung” refers to the source you use for the copy. I think they didn’t write “original” here, because you could make a copy of the original and then in turn make a copy of the copy, which would be allowed under the current wording, but not allowed if they had simply written “original”. But for the first copy, that whole expression boils down to meaning “original”, since you can’t legally own a copy without having the original.
“ein eigenes Werkstück” means that the “Werkstück”, the work, is one of your own. Obviously you are allowed to copy things you produced yourself, so in this case “ein eigenes Werkstück” would mean that you own the work you want to copy.
To sum it up: You could be right about the second part, but I am 100% sure about the last part - it is simply an overblown way of saying that you need to own the original if you want to make a copy of it.
You don’t see it, because I didn’t quote it. It’s in the link I posted. But instead of having an even longer quotation, I chose to add that part, without quoting the original (after all, anyone who is fluent in German and interested in the matter, can click on the link I provided).
Ha! I think I understand the provision “soweit die Vervielfältigung zu diesem Zweck geboten ist” now:
That same line is used for a copy made for “personal scientific use”. In the scientific use it is obvious that you can’t make a copy of your comic book collection, since they are not intended for scientific use.
The “soweit die Vervielfältigung zu diesem Zweck geboten ist.” in the second section - the one I was referring to, which deals with copies for a personal archive - would indicate that the goal of having a backup archive must be there.
Your artist in your example can’t copy the Mona Lisa and use it as a decoration for his living room, because then the “Zweck” - the purpose - of this copy would not be for the archive. If he made a copy of the Mona Lisa and stashed it in his basement, then that’s perfectly ok (provided he owns the Mona Lisa and wants to make a backup copy, which is ridiculous in this particular case, because a copy would be worthless as it was not drawn by Leonardo Da Vinci, but you all get the idea).
I just read back to my translation and it seems to cover this part just fine, about the purpose for the copy being the archive. Therefore I think I was right on the mark with my translation. Unless a German Lawyer is going to object
I don’t have a solid answer – but it’s important to note that cases like this will always be addressed by judges – that is, humans – who can when necessary look beyond the cold text of the law and make a reasonable decision. At this stage I think it isn’t that important yet, as most laymen can see a reasonably solid line of demarcation, even if we can’t articulate its rationale. But as technology progresses and becomes more catholic in its application to the production or multimedia effects – as well as incorporating more interactivity therein – it will become an issue we need to wrestle with. What will likely happen is the same thing that typically happens in these instances (in the U.S., anyway) – some people in various court cases will start making the arguments your ideas suggest, some courts will buy it, and over time a body of law will develop which provides guidance. Eventually there’s a good chance Congress will weigh in and either codify and standardize that body of law, or decide that it given inappropriate results and therefore change it, at the same time hoping to solve any problems that its previous efforts (in 1980) may have led to.
–Cliffy
You’re absolutely right. Though I had to reread the text twice to finally understand the grammar stucture properly… Thanks for the correction. It does make more sense this way.
Ah, now I see. As an aside, it would have helped if you’d mentioned in that passage that you refered to a different section; it now looked as if you were refering to the passage you quoted, hence my confusion. I understood your link as a simple note as the source of the text, and since I trusted you’d quoted correctly felt no need to look it up.
Your interpretation, as concluded in your last post, seems entirely correct to me.
I agree. Bearing in mind that IANAL… if I can read the copyright law (in my case New Zealand’s but quite similar in this respect to the US) and after applying what I know about software (IANAL, but I am a software analyst) end up confused as to what I can or cannot legitimately make backup copies of then it is hard for me to know that I am acting in a lawful fashion. OK, I’m fairly sure that the Software backup permission covers all of my Quake game (including the sound files), and that it probably doesn’t cover backing up my Pogues CD, but as Cliffy said:
For example, a while ago I bought a CD of the anniversary edition of Grease… don’t look at me like that … and that audio CD also contains some movie clips to be played on a computer. This seems to me to blur the otherwise fairly clear line between an audio CD and software. Or consider the DVDs that contain extra content that can only be displayed using a DVD-ROM… many of these contain interactive games, or web links… if this isn’t software I’m at a bit of a loss to find a good definition.
Logically I would hope yes. The point of making a software backup (and in NZ law at least this is quite obvious) is to protect the user against loss of the legitimately purchased software. If I purchase a Shareware Key and it comes in the form of, for example, an electronic file then I think I should be able to back that up along with the program to protect my legitimate purchase (the fully operating program) against accidental loss. (If the key comes in an email message then things become even trickier).
Trying to head back in the general direction of the OP, there does appear to be some double standards at work (software aside), with large and respectable companies selling products that appear to have no purpose other than breaching the copyright on audio CDs. It is possible to purchase record players with UBS connections – whose obvious purpose is to move music from records to computer disc. I have also seen CDRs for sale tricked up to look on the top surface like old 45 records (made by Mitsubishi IIRC) being sold with the express prupose (as printed on the packaging) of preserving your old vinyl by burning it to disc.
This appears to me to be a clear breach of copyright (even if I destroyed the vinyl afterwards I would still have made an unlawful copy, wouldn’t I?)
Maybe such items are not available in the US… but if they are, how are they permissible?
They’re permissible under Fair Use, which while I agree does not implicity say “a backup copy for personal use is allowed” but it doesn’t say we can’t do that either so in the eyes of the law only an attempted sale of the copyrighted material raises any eyebrows.
Section 1001, Title 17 of the United States Code
(A)
A ‘‘digital musical recording’’ is a material object -
(i)
in which are fixed, in a digital recording format, only sounds, and material, statements, or instructions incidental to those fixed sounds, if any, and
(ii)
from which the sounds and material can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.
(B)
A ‘‘digital musical recording’’ does not include a material object -
(i)
in which the fixed sounds consist entirely of spoken word recordings, or
(ii)
in which one or more computer programs are fixed, except that a digital musical recording may contain statements or instructions constituting the fixed sounds and incidental material, and statements or instructions to be used directly or indirectly in order to bring about the perception, reproduction, or communication of the fixed sounds and incidental material.
©
For purposes of this paragraph -
(i)
a ‘‘spoken word recording’’ is a sound recording in which are fixed only a series of spoken words, except that the spoken words may be accompanied by incidental musical or other sounds, and
(ii)
the term ‘‘incidental’’ means related to and relatively minor by comparison.
Why can I start a business to RENT out legitimate originals of DVDs and Videotapes, but I’m NOT allowed to RENT out legitimate originals of music CDs?
I don’t quite agree – IMO, it is not that these devices are permissable under Fair Use, but rather that since the law is still somewhat unsettled in this area the manufacturers of such devices can reasonably say that they figured it was legal. Note also that there are permissable uses for such devices, even if few ever use them. For instance, there’s quite a bit of old music around that is in the public domain, and it perfectly legal to copy that. If you have some old swing 78’s that have fallen into the PD, it’s probably a good idea to transfer them on to CD for listening purposes and pack the vinyl away in your vault for posterity. Or you might use your mp3 player to hold a bunch of songs that your friend wrote and performed himself and for which he’s given you permission to do this.
–Cliffy