Testing The Right To Resell Downloaded Music

David Gerard writes "A man has bought a song from Apple iTunes and has put it up for sale on eBay. "I only spent $0.99 on it but I bought the song just as legally as I would a CD, so I should be able to sell it used just as legally, right?" Does the Right of First Sale still exist?" The seller says he's seeking attention, but not to himself. Rather, he calls this "an experiment in property rights in the digital age," and promises not to keep a copy once the sale is done.

Comments

Article text (already slow to subscribers)

[mao che minh]

Does the Right of First Sale Still Exist?

I just posted an eBay auction for a song I bought from the iTunes music store. It should be interesting to see how this works out. I only spent $0.99 on it but I bought the song just as legally as I would a CD, so I should be able to sell it used just as legally right?

[Update 09-03-2003 10:08 AM] Right now I've come up with a couple ways that the transfer of ownership could take place. One is to call up Apple and ask them to do it for me, which would be an interesting call. The other way would be to give my account to the winning bidder, which doesn't seem like a bid deal considering that I've only purchased one song. Still, I'd have to make sure that my credit card info was completely disassociated with the account. Or I could just create a new account and repurchase the song on that account.

[Update 09-03-2003 11:25 AM] I'd like to respond to a few points made by people: 1. It's true that I'm seeking attention, but not for me personally. This is an experiment in property rights in the digital age, something that's gotten surprisingly little attention. 2. I've read the iTunes agreements and found nothing denying transferability. This isn't any more a commercial venture than selling CDs at the local music store, I'm not incorporated or even DBA. Furthermore, in case anyone thinks this is a cheap way to make a buck I will be donating all proceeds to the EFF. 3. When the song is successfully transferred, I will not be keeping a copy of the song. If I don't own it I shouldn't have a copy.

[Update 09-03-2003 11:25 AM] A very excellent comment below by Piggly Wiggly asks if I will convert the format for delivery. My answer right now is "no" because I don't want to cloud the issue of the sale by changing the format. Also, I'd like to thank all the people posting supportive comments who realize that this is about more than a $0.99 song being over-valued on eBay.

Re:Article text (already slow to subscribers)

[sh00z]

Right now I've come up with a couple ways that the transfer of ownership could take place.

It's simple. I've already moved an iTunes purchase to a second computer. You just have to enter your Apple ID and password on the second Mac to authorize it. Now, here's the fun part: once somebody has your Apple ID and password, he can go hog-wild at the Apple Store online, buy anything he wants, and it will be charged to your credit card. This includes hardware and software purchases too, not just iTunes music. So, in addition to deleting the original file from his computer, the seller will first have to:

1. De-authorize his computer from iTunes (so that the song will have its full, legal ability to be authorized on three machines)
2. Copy the file to whatever media he's using for transfer
3. Delete the original
4. Cancel the credit card used to purchase the song
5. Send the song, the Apple ID and password to the buyer

Simple!

Re:Article text (already slow to subscribers)

[rednaxela]

This is likely to cause a rather serious problem for our fair hero. Excerpted from http://www.info.apple.com/usen/musicstore/policies .html CONTENT USAGE RULES Your use of the Products is conditioned upon your prior acceptance of the terms of this Agreement. You shall be authorized to use the Product only for personal, non-commercial use. You shall be authorized to use the Product on three Apple authorized computers. You shall be entitled to burn and export Products solely for personal, non-commercial use. Any burning or exporting capabilities are solely an accommodation to you and shall not constitute a grant or waiver (or other limitation or implication) of any rights of the copyright owners of any content, sound recording, underlying musical composition or artwork embodied in any Product. You agree that you will not attempt to, or encourage or assist any other person to, circumvent or modify any software required for use of the Service or any of the Usage Rules. The delivery of a Product does not transfer to you any commercial or promotional use rights in the Product. Refer to Terms of Sale for more detailed information on Usage Rules.

Re:Article text (already slow to subscribers)

[Lord Dimwit Flathead]

I don't see anything in there forbidding transfer of the license; it seems to be more concerned with unauthorized duplication and commercial use. Of course, now that this is getting attention, I'm sure the terms will quietly be amended to explicitly state that the user is purchasing a nontransferable license, but there seems to be some wiggle room in there at present.

Re:Article text (already slow to subscribers)

[tftp]

IANAL, but it's not a problem. Sale of a personal property is not a commercial usage because how can one use something that he is parting with? As another example, CDs are also authorized to be used non-commercially, but it is legal to sell a used CD.

Commercial usage would occur if you, for example, play the song in your bar, or broadcast it through your own radio station. None of that applies here.

Re:Article text (already slow to subscribers)

[timeOday]

Who cares what the EULA says? If Ford decides to disallow reselling cars to prop up new car sales, would anybody obey them? Just because the seller desires something doesn't make it so.

Sounds reasonable

[Brahmastra]

This is hilarious. I'd like to see how the RIAA spins this. After all, they haven't ever whined about used CDs being sold.

Re:Sounds reasonable

[tgd]

Um, they've complained since day one about used CD stores. Numerous attempts were made to shut them down, and to make them illegal. Sure, it was ten plus years ago when most of /. was riding bigwheels in their parents driveways, but they most certainly DID do precisely that.

Re:Sounds reasonable

[Brahmastra]

Actually here's an older slashdot story about record companies demanding royalties for used CD sales. They have always been SOBs and always will be: http://slashdot.org/articles/02/06/14/2111220.shtm l?tid=141

Son of a bitch.

[BoomerSooner]

I sold that song yesterday for $0.25. If I'd only known that I could post it to slashdot.

Slashdot, News for Nerds and eBay listings.

DRM Restriction

[Broadband]

Isn't it assumed that the DRM included in iTunes would disallow something like this even though it should be completely within the right of the purchaser/owner? I think this is another major problem with DRM technologies. They assume that the purchaser will desire to keep the media indefinately rather then sell it. Then again with the music industry already attacking used CD sales from cutting into their profit I highly doubt they'd want it any other way. What's better then forcing new copies of songs/albums to be purchased rather then continue the ability for it to exchange hands via a 3rd party at a possibly lower rate then the Music Companies would be willing to discount it to?

Re:DRM Restriction

[fahrvergnugen]

That's only true if those terms and conditions don't violate existing law. My landlord can't, for example, enforce a clause in the lease saying that part of my deposit is automatically forfeit for carpet cleaning when I move out, even if the carpet is spotless.

She can TRY if she wants, and the clause can be there, but it's an illegal clause and thus is unenforcable, and I can take her to court in this state and get my money back.

There are some rights one cannot sign away, no matter what the TOS might say. The question here really is whether right of first sale is one of them.

Re:DRM Restriction

[gurps_npc]

That is incorrect, although a popular idea among business attorneys.

MANY rights can not be given up, no matter what you sign.

For example, slavery is illegal no matter what you sign.

Parental rights also are sometimes considered valid, even if you signed them away (as in surrogate parents).

The question is, is it possible to give away your right to sell an object and still be considered the legal owner of it. And that is very much up in the air. The right to sell is considered by many to be inherent to ownership.

Consider a bankruptcy case. Assume someone went was rich and had a huge collection of purchased songs, say 50,000 at $1. each. Would a judge be able to legally order those songs sold for? Or could the rich man say, no I can't sell them according to the TOS.

I think the TOS would be thrown out and the songs sold.

Re:DRM Restriction

[Odinson]

By clicking this you agree to ship us your first born postmarked within 48 hours (business days only). Click here for packing instructions.

Just because it's in a contract doesn't mean it's legal. Much less enforcable, moral, or in a sane alignment to the natural doctrines of the free market and capitalism. It just means another lawyer is off the bread line.

Re:DRM Restriction

[terrymr]

Suppose all credit cards came with an indentured servitude clause?

You mean yours don't ? Damn I'll have to get some new ones.

Re:DRM Restriction

[dasmegabyte]

I would have to say that, thanks to DRM, Apple doesn't give a shit what this guy does with the SONG FILE. They'll let him sell it for a penny or $400, or whatever he wants.

Because the file iteself is useless without the iTunes account that set it up. That's how this DRM works. The account is what unlocks the file and makes it play music. And I'm sure that accounts are non-transferrable, except among computers you yourself own -- and you wouldn't want them to be otherwise, since the account is connected with your credit card, and can be used to purchase more songs. That's the real protection, the thing really preventing people from spreading their iTunes files all over the net...the threat of misuse of their account. Shit, I don't even leave my iTunes sessions open anymore, because my wife once bought a bunch of Nick Drake CDs on my account(It's the same credit card, I know...I just don't want anybody thinking I listen to that crap).

So there's an issue here most people aren't seeing. There's a good and a service involved in this sale. The good is the file itself. The service is Apple's unlocking of the DRM.

When I got my house painted, I paid for two things: the paint (a good), and the painter's work (a service). When he was done, i got to keep the leftover paint. I didn't get to keep him, I don't have any control over what he does from now on. I can sell you the extra paint, but if you want to get it on your house you'll have to pay the painter. You can try and convince him that I paid for his unlimited service based on the paint he sold me, but he will probably just laugh at you...even if I promise to scrap all the blue off the house myself, and transfer it to you.

Isn't that what's going on here? The only confusion is over what the consumer's rights are, and what the medium is. Apple gave him a file and promised their services to unlock it an unlimited number of times to play it on his computers. If he gives it to somebody else, that's his own accord. The file is his to give. But the buyer shouldn't expect Apple to do anything for them. After all, they don't have a contract with Apple. Apple doesn't know the buyer from Adam, and if they don't want to perform a service for the buyer, they shouldn't have to.

Re:DRM Restriction

[po_boy]

The question is, is it possible to give away your right to sell an object and still be considered the legal owner of it. And that is very much up in the air. The right to sell is considered by many to be inherent to ownership.

That's the position I'm in with my left kidney and my right eye. It's my understanding that I own them, but here in the US I can't sell either. (especially not on eBay.)

Resell ?

[frodo from middle ea]

An interesting point to consider is that,
Currently Apple doesn't allow download outside US, so if he is infact legally allowed to sale his bought music, then
Can he sell it outside US, at a higher price and make profit ?

Transfer?

[Dark Paladin]

My main question is how would the ownership of the file be transferred?

At the moment, the Apple Store lets you "authorize" music files. So for this person, after the file had been "sold", he would have to deauthorize the up to 3 other computers that had been allowed to play the song, give a copy of the file to the buyer, then provide them with his Apple iTunes Store username/password so they could authorize it on their machine.

As he mentions, he could call up Apple and ask them to switch his authorization of the song to another user.

Either way, it does raise an interesting question, and as someone who has been using the iTunes Music Store, I've never thought about it: Suppose that years from now, I want to sell all my downloaded music files to someone else. Is there a way to transfer the license? What if I left them in a will to my children later on - could Apple be required to ensure that they could use the files later?

Or he's about to run into a massive "legal agreement" which will negate his First Sale ability - we'll just have to see what happens, neh?

Highest Bidders Name

[Hex4def6]

The highest bidders name at this time is a guy called Unicks - judging from his name, I wonder how much trouble he's goiong to have to go through in order to play it :)

Re:Apple usage policy

[Casca]

Jesus, read past the damn headline... He already said there isn't anything in the agreement with respect to transfer.

Hmmm..

[BMonger]

My only hope is he doesn't ruin the iTunes music store for the rest of us somehow.

Re:TOS compatible

[period3]

But donating $20 to the EFF doesn't seem moronic. RTFA.

It depends on the use.

[jellomizer]

I think if he buys the song then when he sells it he deletes his copy, This would be a fair use and trading. But if he downloads the song and sells many copies or keeps the original. Then that is moving into the range of illegal. This is a different animal then file swapping because money is trading hands. So if you download one song for $1 and then sell many copies then that is easily in the realm of music piracy. But I don't think this will go to far because this opens up a can of worms for legality and starting business that is almost impossible to enforce. If this were legal they will need to provide paperwork that makes a tax audit seem like a day at the peach.

Terrible Choice Of Song

[RobertPearse]

Jeez, what a terrible choice for testing legal rights. Why couldn't he have picked something like "Money", "Fight For Your Right (To Party)" or "Equal Rights" by Peter Tosh.

Or maybe he's should pay the buyer to take the crappy song from his crappy collection of movie soundtracks.

Excellent

[LLWhipist]

This is excellent and brings up quite a few legal questions.

Given that I'm not a lawyer though I'll just give my opinion (worth less than the original price of the song).

1) Unless it clearly states in the agreement made with apple, there is nothing preventing him from making this sale. He purchased the right to listen to that song in the specific format, it's his to dispose of as he chooses.

2) Making a sale for a profit in no way makes him a bad person (and he's claiming he'll be donating the money). I can't see how he could be legally required to pass this profit on to the original artist or to the supervising agency (in this case Apple who sold him the song).

3) The RIAA has nothing to do with this. As someone mentioned, they don't complain about the resale of CDs or DVDs (at this point) and there is no legal basis for them to in the future.

All and all I think this is an excellent way to bring attention to this issue. My only concern is that it will cloud the already muddy legal waters and make things more difficult for us lay folk to understand.

Cheers.

Coming soon to an OS X Mac near you...

[Anonymous Coward]

"Software Update has found the following updates:

iTunes 4.0.2
Closes loophole in iTMS EULA which implies transferability of purchased music to a third party. It is recommended that all users of iTunes install this update."

Shipping?

[CGP314]

Will ship to United States only.

Are there high email costs to other countries that make shipping too expensive?

Re:I like freedoms and stuff very much but...

[FileNotFound]

Yes but thats alot more effort and you can only sell the used CD once.

I could be wrong, but is there something that will prevent the files from being sold over and over again by the same person with all profits going to himself instead of EFF?

Huge profit

[MyRuger]

The high bid is currently $20.50. I'm sure that a few lawyers who want to get involved in the case will pump this bid sky high. It may be worth $20,000 to some lawyer trying to get famous. It's just speculation now, lets see what happens.

Re:Huge profit

[Grishnakh]

It's up to a whopping $300 now!

I wish I had thought of this...

Re:Huge profit

[Anonymous Coward]

According to the RIAA, the song is at least worst $150,000.

Re:Have no doubt...

[I8TheWorm]

Sadly, there's probably some truth to that. Since filesystems don't actually delete a file when you delete them, the residual bits of data would be the RIAA's biting point.

eBay policy

[n3xup]

Here is what eBay says about such sales:

Downloadable Media Policy

eBay prohibits the listing of items or products to be delivered electronically through the Internet.

Examples
A copy of a software program which the successful high bidder can download from your Web site
Music or video files that you will deliver through a peer to peer file-sharing community or network
A copy of a downloadable eBook
A secret URL address where the high bidder can download "freeware" or "shareware" software programs

Doesn't seem like this is okay with eBay.

Re:eBay auction

[Bobman1235]

As of 4:00PM Sept. 3, 2003, there are already well over 30 bids on the I-Tune, and bidding has exceeded $20. The original price was only $0.99. Very interesting.

Well, he is donating all of the proceeds to the EFF, so most likely people are just chocking the money up to a donation and bidding out of curiosity for the outcome.

Copy of the iTunes User Agreement

[Sophrosyne]

I copied the iTunes User Agreement.
It's available in PDF and TXT for your enjoyment.
I haven't read it over yet... but I bet this guy is just asking for trouble.

Re:Copy of the iTunes User Agreement

[Paul Slocum]

It's right there in the license: "3. Transfer. You may not rent, lease, lend or sublicense the Apple Software. You may, however, make a one-time permanent transfer of all of your license rights to the Apple Software to another party, provided that: (a) the transfer must include all of the Apple Software, including all its component parts, original media, printed materials and this License; (b) you do not retain any copies of the Apple Software, full or partial, including copies stored on a computer or other storage device; and (c) the party receiving the Apple Software reads and agrees to accept the terms and conditions of this License." -Paul

Donate the proceeds to the EFF? Hah!

[raehl]

More likely the EFF will have to come save him when his proceeds don't nearly cover the legal bills associated with defending the lawsuit some scared industry association throws at him.

how about the right to redownload?

[asv108]

While this example does demonstrate one of the short comings of digital music services, I think a more important issue is redownloading. If an Apple iTunes music service user happens to experience a hard drive crash, they must repurchase all downloaded songs that were not backed up. That's right, even though Apple keeps track of your purchase history, and even prompts to tell you that you are buying a song that was purchased before, iTunes users must pay again for the song.

Apple Apologists argue that its the user's fault for not backing up the song immediately after downloading and that a hard crash is the same as having a CD scratched or stolen. While there are many steps a CD owner can take to prevent scratches and theft, there is very little an iTunes user can do to prevent a hard drive crash from occurring. Backups are important, but short of backing up every song the minute you download it, there is no way to prevent people from getting screwed.

Re:eBay auction

[El]

I hope the winning bidder is a lawyer!

Re:I like freedoms and stuff very much but...

[beenay]

It is true that it would be near impossible to enforce this. A person could sell a copy and keep the original, and barring a legal seizure of his computer no-one would ever know. This is just like insider trading laws. Insider trading happens all the time and it is near impossible to prove. Insider trading should be illegal, and is. If we argue that we shouldn't be allowed to resell MP3s because some people may not delete the original, then we will have to argue that no-one should be allowed to resell stocks because some people may only buy after engaging in insider trading. You don't prohibit freedoms for law abiding citizens because it will be near impossible to prosecute law breakers. It's unamerican.

$320!!?!

[LaForce]

With all this bidding you're going to convince the RIAA that their music might actually be worth the ridiculous numbers they use in their court cases. Then when cost goes up, everyone who hasn't purchased the new CDs can be sued, because the decreased sales must mean that everyone is pirating! Whee, slippery slopes are fun! :)

Shoulda been Metallica...

[siskbc]

...that would have been damned funny. ;)

Suck on this, Hetfield.

Re:Hmmm

[schon]

When you resell that same item, the artist gets -nothing- out of the deal except for possibly a miniscule growth in fan base.

And can you tell me why they should? They've already been paid for it, why should they be paid again? When I sell my used car, should I have to forward a portion of it to Chrysler?

Remember, you have rights to fair personal use, just like with software. But if you read the fine print selling that software "used" is often forbidden by the license terms.

So don't agree to the license. As you said, you have the right to fair use, so using the software without agreeing to it is a non-issue. Unless the license grants me something that under copyright law I don't already have, I'd be pretty stupid to agree to it, wouldn't I? (Yes, I know that the license says that I can't use the software unless I agree, but since I'm not agreeing to be bound by the license, nothing it says matters.)

It certainly would not be hard at all to package digital records with a player, calling the whole package "software", the songs "content" and then being MUCH more restrictive on terms.

So I'll just ignore that license too. No big deal.

Check his feedback!!

[nolife]

Potential scam!! The seller only has 1 feedback and it's over 6 months old. It's only a A++++++++. I'd be careful of anyone who recieved less then 15 +'s in a single feedback comment. Buyer beware.

Re:What is legally happening here?

[Graff]

the relevant question is not what he considers to be copying, but what the law does.

A very good observation. I believe it is illegal (ie, against copyright law) to reproduce a work through any type of copying. This would be similar to photocopying a book, burning the original, and selling the copy to someone. It's the very act of copying the work that is illegal because you were not given the right to reproduce the work. Here's the relevant section of the code:

106. Exclusive rights in copyrighted works

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;
...

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

So, since only the original author has the right to reproduce the work it would be illegal to reproduce it. If the iTunes music store specifically gave you the right to reproduce the work then you could make a million copies. However, you would then run into section 3 of the code quoted above, which says that only the owner of the copyright can transfer ownership of a copy of the work.

A very thorough and much more involved look at the First Sale Doctrine can be found at the Duke Law & Technology Review article: "THE FIRST SALE DOCTRINE AND DIGITAL PHONORECORDS"

Re:What is legally happening here?

[ichimunki]

The courts have ruled that mere possession of the physical medium does not imply license to use, as does the possession of a book or musical recording, because to make use of the digital data it must be copied into memory first and that copying is covered under copyright law as restricted. Thus you need a license to copy that which you have already purchased for use.

Bull-hockey. The courts have ruled no such thing. In fact, the copyright law specifically allows for this sort of "copying" the data into memory in the case of computer software or other cases where such "copying" is a necessary part of using the copyrighted work.

RTFM:

117. Limitations on exclusive rights: Computer programs

(a) Making of Additional Copy or Adaptation by Owner of Copy. -- Notwithstanding the provisions of section 106, it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided:

(1) that such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner, or

(2) that such new copy or adaptation is for archival purposes only and that all archival copies are destroyed in the event that continued possession of the computer program should cease to be rightful.

This is a CYOA policy

[sheetsda]

You'll notice Ebay doesn't ever seem to stop sale of Diablo2 and other online virtual items that can only be "delivered electronically through the Internet". It's just there so when seller X doesn't deliver to buyer Y, Ebay can say "You're not suppose to be bidding on that type of thing and he wasn't suppose to be listing that type of thing so tough luck."

Tell Apple what we think!

[Kulaid982]

At about 5:00, I called Apple, to get their opinion on this whole thing. They had no clue what's going on. What I did get from them was a number direct into their corporate headquarters (I had asked for PR or the legal dept.) This means we've got a prime opportunity to voice our opinions to Apple and hopefully sway them in a direction that will be favorable to all us /.ers.... Call them at 1(408) 996 1010 and simply wait for a rep or leave a message. Let's all urge Apple to support and embrace the resale of digital music. This could be a huge victory and give us ammuniton against the RIAA. Call Apple, tell them that they'd better not screw this up. Do the right thing, Apple.