updated 05:02 pm EDT, Mon April 1, 2013
Court rejects first-sale-doctrine defense
A federal judge has ruled against digital music reseller ReDigi, describing the company's business model as a form of copyright infringement. The decision, which was posted by Wired (PDF), rejects ReDigi's claims of protection under the first-sale doctrine, as initial buyers can simply make a duplicate copy of a digital track before offering it for sale through the resale system.
Judge Richard Sullivan of a US District Court in New York referenced an earlier ruling on peer-to-peer sharing in his argument, focusing on the definition of "material object" as applied to digital music files. He suggests it is "simply impossible" for a music file to be transferred over the Internet without essentially reproducing the file in another place.
"Because the reproduction right is necessarily implicated when a copyrighted work is embodied in a new material object, and because digital music files must be embodied in a new material object following their transfer over the Internet, the Court determines that the embodiment of a digital music file on a new hard disk is a reproduction within the meaning of the Copyright Act," the ruling reads.
The lawsuit was initially filed by Capitol Records, which claimed that ReDigi's cloud-based server and resale system was being used for copyright infringement. The court did not go as far as siding with Capitol's suggestion that merely offering its tracks for sale constituted copyright infringement, however this issue was considered irrelevant due to evidence that actual sales have occurred.
Judge Sullivan further suggests that ReDigi would need an amendment of the Copyright Act to protect its business model from legal liability. "However, here, the Court cannot of its own accord condone the wholesale application of the first sale defense to the digital sphere, particularly when Congress itself has declined to take that step," he added.
Although the case is limited to Capitol's music library, the ruling is expected to have wider implications for the nascent digital-resales industry. Copyright holders, end users and resellers are also fighting legal battles related to other products, such as software licenses and book scanning.