Are ringtones legal? Absolutely! As long as the ringtone has paid a royalty, it is perfectly legal. However, some music publishers and composers have argued that these ringtones are not “versions of existing songs”. A ringtone is not a small set of instructions that refers to the original music file you purchased. It is important to note that the terms of use allow you to put iTunes music and videos other than ringtones on “up to five Apple-authorized devices” at a time, and allow you to store purchases from up to five iTunes accounts on a single device.
The Recording Industry Association of America (RIAA) opposed this idea because it would mean that it would have to negotiate separately with music publishers the recording rights to a song and the right to use part of it as a ringtone. You cannot create ringtones with music you bought on CD or in other formats (such as MP3 files directly from the artist).
