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Universal Attacks First Sale Doctrine

I Don't Believe in Imaginary Property writes "In Universal Music Group v. Augusto, UMG is attacking the first sale doctrine. The issue concerns some promotional CDs that were mailed out, and later found their way to eBay. According to UMG, the stickers on the discs claiming that they still own the CD give them a legal right to control what the recipients do with them, and thus, UMG should be able to dictate terms. The EFF has filed an amicus brief countering that claim, saying that because they were sent by US mail, unrequested by the recipient, they are in fact gifts, no matter what the sticker claims. If UMG somehow wins this, I plan to send them CD of copyrighted expletives with a sticker informing them of the contractually required storage location. We discussed a similar issue with e-books a couple weeks ago."

17 of 297 comments (clear)

  1. Seems like the issue is confused by iluvcapra · · Score: 3, Interesting

    I don't think this is a First Sale issues, since, clearly, the discs are at no time sold. They send them promotionally to people in the recording, film, and media industries for review, evaluation etc. I get them all the time because some random label hopes I'll tell a director to put in these "hot new tracks" (or not). They got a big sticker on them that says, essentially, "NFR". I don't think they're the property of the label, strictly, but the labels and the media endpoints that consume the NFR discs both benefit from having them. Maybe selling them is de jure legal, but it's really dickish.

    Any developers wanna opine on how they'd feel if some software reviewer at cnet started selling their NFR copies of pre-release software?

    --
    Don't blame me, I voted for Baltar.
    1. Re:Seems like the issue is confused by evanbd · · Score: 5, Interesting

      Actually, the courts are quite clear on the matter. Labels on books or records sold are not sufficient to remove the right of first sale. If it acts like a sale, it's a sale. There have been attempts to sticker books to prevent resale that have been struck down. Furthermore, gifts count as sales for purposes of the doctrine of first sale, as does any other means of legally acquiring a legally produced copy. Merchandise sent through the mail unsolicited may be treated by the recipient as a gift (there's a long court history for this, mostly motivated by people sending unsolicited products and then billing the recipients). And, even if it wasn't a gift, UMG abandoned the CD under California law, since they gave up possession and their actions clearly indicated they had no intent to regain possession (they don't keep records of who has the CDs, and they have never in the past attempted to reaccquire one). So, whether by gifting or abandonmnent, ownership of the CD was legally transferred in a manner equivalent to a sale, and any sticker on it is insufficient to prevent the doctrine of first sale from taking effect.

      The brief is quite readable, and quite thorough in explaining how UMG are being completely and utterly ridiculous.

      PS, by reading this post you agree to... We've all seen comments like this in regard to EULAs and such; those stickers are no less ridiculous, and no more legally binding.

    2. Re:Seems like the issue is confused by pimpin+apollo · · Score: 2, Interesting

      First off, sending a gift is not abandonment. It might be relinquishing your own ownership or title, but abandonment it is not. Second, contracts can continue to operate even absent ownership. Any number of contracts have nothing to do with ownership--let's say a lease on an apartment. The contracts are simply you do X and I do Y, and we have a deal. That's what's at issue here. The question is a classic contract law question--was there a contract.

    3. Re:Seems like the issue is confused by uglyduckling · · Score: 3, Interesting

      And the answer is... no there wasn't a contract. If I did some detective work and found out who pimpin_apollo is, worked out your street address and mailed something to you, would there be a contract? No! These guys are sending take-down notices to Ebay for traders that are selling promo copies on the basis that they are promo copies with no idea of thier provenance. If there had been some sort of record, e.g. numbered copies sent to named individuals with whom an agreement (i.e. contract) had been made then things might be a bit different, but that's apparently not the case here.

      Also, you're a little of the mark with the gift/abandonment thing. The GP is saying that that are a gift, but if it is argued that they're not a gift then they are in fact abandoned. I said similar with another comment - if they claim they have not given these items to the recipient and that claim is upheld then they should be charged with fly-tipping/dumping/whatever is the local equivalent because they are sticking object in people's mailboxes without prior consent.

  2. Didn't we already see this with the cuecat by Anonymous Coward · · Score: 1, Interesting

    Wasn't there some stupid company 6-7 years sending unsolicited barcode scanners called the "cat-something-or-other"? They had some hare brained scheme of money by having people scan bar codes of products and transmit them back to the company.

    Unfortunately for the company, people had better ideas what to do with the product. The company tried to sue and they were laughed out of court.

  3. The EFF brief is well worth reading by evanbd · · Score: 4, Interesting

    Dear record companies:

    When your own VP of content protection admits in a deposition that he has bought some of your promo CDs on the second hand market, your case that someone selling them on eBay is infringing your copyrights starts to look, well, ridiculous.

    (EFF Brief, page 18.)

  4. In the UK, this absolutely clear cut by gowen · · Score: 5, Interesting

    Unsolicited packages are gifts, as long as you're the intended recipient (and yes "The Occupier" counts). (Unsolicited Goods Act, Consumer Protection [Distance Selling] Act).

    I would say "I can't believe the US doesn't have similar laws", but I can, because I recognise a country where Corporations have a massively disproportionate sway on legislators.

    --
    Athletic Scholarships to universities make as much sense as academic scholarships to sports teams.
    1. Re:In the UK, this absolutely clear cut by Anonymous Coward · · Score: 5, Interesting

      "is accepting the CD sufficient to create a contract."

      No, acceptance of a gift doesn't create a contract. Otherwise the "free" gift followed by a bill scam would be legal!

      That's an open question.

      No it isn't.

      Silence is not acceptance, but it's a thin line to acceptance.

      So it's okay to rape a mute on your planet? Seriously, you can't mail contracts out to people and then claim they're legally bound by them. Even the suggestion is ridiculous.
  5. The long term effects by Per+Abrahamsen · · Score: 5, Interesting

    But what if Universal had signed a contract with each and every DJ and reviewer that got a promo copy that said "in exchange for getting this CD a week early, you have to keep it secret." The key phrase from the parent was unrequested by the recipient. It is fundamental to contract law, that a contract must be accepted by both parties to be valid. The "long term effect" of abandoning that is severe.

    The way to deal with reviewers who doesn't treat your unsolicited promo material with proper discretion, is to stop sending unsolicited promo material to those reviewers.

    It's not an easy issue and there are arguments on both sides. Yes, on one side there is respect for the fundamentals of contract law. On the other side, there is the slight inconvenience of labels to have to maintain a list of trusted reviewers (rather than just maintain a list of reviews).

    It does say something about how the labels have gotten adjusted to having the law formed for their convenience, that they now want to change how the legal system works, just to avoid the inconvenience of making some minor changes to their internal procedures.
  6. Re:What are the long-term effects? by Library+Spoff · · Score: 4, Interesting

    This happened to my pal who owns a record shop. He found a *5* year old madonna promo in the back shop. Stuck it on ebay to see what he'd get and the auction got pulled.if it was a pre-release, fair enough. But it was 5 years old...

    --
    Acid House saves Souls
  7. cant have it both ways by TRRosen · · Score: 3, Interesting

    these lawyers should really read there own briefs. There is no copyright law in play here. Universal is the copyright holder and Universal made the copies. filing a DMCA is harassment and abuse of process. By there own statements there claiming that they own the cd's ... So its a case of selling stolen property. There saying to original recipients did not have standing to sell the cds to the defendant. But i can guarantee the cds are not listed as assets by the company. So we have a company claiming this guy is selling stolen merchandise that in other legal fillings (read SEC) they don't claim to own. If this guys lawyers are any good he'll retire to a nice island in the bahamas after this.

  8. Re:when would they learn.... by grahamm · · Score: 4, Interesting

    At least under UK law, if the sender claims to retain ownership then the recipients have the option of requesting the sender to collect the goods (or for small items provide pre-paid postage for their return) and if they do not to levy a storage charge. If after the certain period of time the sender does not arrange the return, then the goods become the property of the recipient.

  9. Re:when would they learn.... by Firethorn · · Score: 4, Interesting

    US law, at least for goods sent through the USPS*, is even better - if you sent me something unsolicited through the mail, it's mine.

    They can 'arrange' for pickup all they like, I don't have to do a thing. It's my choice as to whether to give it back or not.

    *The USPS is actually part of the Federal Government, it's just self sustaining through the sale of stamps and such.

    --
    I don't read AC A human right
  10. Re:What are the long-term effects? by falcon5768 · · Score: 4, Interesting
    I worked the arts desk for a school paper for a year. I can tell you flat out they do NOT make you sign anything, they just send you boxes and boxes of CDs to review. I used to hold a contest a week to give out whatever I reviewed that week in our office because they do NOT collected nor make any attempt to collect them later.

    And the rarely if ever do you get a CD before the street date. Maybe a week or two. But good artists? Nope never happens. What they typically do is invite you to a listening party to review it (while at the same time showering you with food and drink to bribe a good review out of you.)

    And the REAL truth is the CDs ARE paid for. They charge the artist for "promo" copies as part of advertising. Universal claiming these are their CDs is about as big a joke as the RIAA in general. They where bought by the artist... if anyone has the right to tell people what to do with them, its the guy who's salary was raped by the suits.

    --

    "Slashdot, where telling the truth is overrated but lying is insightful."

  11. Re:when would they learn.... by jahudabudy · · Score: 4, Interesting

    If my legal-fu is working today, this would seem to imply that Universal's claims that the promotional CDs are not a gift is an admission that they broke whichever statute your link refers to. If these aren't gifts, and Universal isn't a charity, that blurb makes it pretty clear everything else is illegal to send without the recipient's permission.

    --
    ...sometimes, in order to hurt someone very badly, you have to tell that person terrible lies. - PA
  12. Not unrequested by Beorytis · · Score: 2, Interesting

    The "unrequested" word is the hole in EFF's argument. Many radio stations and music publications have websites with some language of the effect: Send promotional materials to this address. That's a request as far as I'm concerned. My wife is an independent recording artist, and at first it pained her to see the promo copies on eBay and Amazon marketplace competing with the real product, but at least the music is out there. We don't sue anybody; we just ink the name of the station or publication onto the face of the CD. The descriptions of the used product for sale let us know where not to send promo CDs in the future. As an aside: Surprisingly few radio stations and publications will accept any digital form of promotional materials!

  13. Re:when would they learn.... by sumdumass · · Score: 4, Interesting

    One of the issues of confusion here is that UMG specifically reserves their copyright privileges and rights but aren't asking for payment. This jumps into some gray area because they didn't ask for a payment and aren't asking for one. The effect is something along the lines of me mailing you a letter and a key saying since your lawnmower broke last year, you can use mine on these days but you can't let anyone else use it and you can't attempt to sell it or otherwise dispose of it. If you post my mower on Ebay, then we have issues that this law might not cover.

    Personally, I am of the thought that it would be a gift, but I can see the logic where even a gift would have limitations.