The problem I think we all have with their argument is that they mentioned any specific data format. If the intent was simply to prove that the distribution of the files was at issue, it is unnecessary to specifically call out the specific detail that the "Defendant converted Plantiffs' recording into the compressed.mp3 format".
Calling out that detail suggests that the conversion to mp3 is related to the copyright infringement in question. Having that language in the filing gives them precedence for future lawsuits that don't involve distribution. And that is why this is even a discussion.
That language also infers that there exists some format for the files that would be legitimate to place in the shared folder.
And what about new business models? What if some upcoming artists (or established ones like They Might be Giants) want to release samples and allow them to be used as ringtones and copied around? Having actually seen a recording contract coming from the music industry, one of the "standard" clauses they include involves the artist signing over publishing rights to their music in all current and future formats. That'll pretty much cover any new business model.
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Calling out that detail suggests that the conversion to mp3 is related to the copyright infringement in question. Having that language in the filing gives them precedence for future lawsuits that don't involve distribution. And that is why this is even a discussion.
That language also infers that there exists some format for the files that would be legitimate to place in the shared folder.