Judge Rules That Resale of MP3s Violates Copyright Law

Redigi runs a service that lets you resell your digitally purchased music. Naturally, they were sued by major labels soon after going live, with heavyweights like Google weighing in with support and an initial victory against pre-trial injunctions. But the first actual court ruling is against them. Pikoro writes "A judge has sided with Capitol Records in the lawsuit between the record company and ReDigi — ruling that MP3s can only be resold if granted permission by copyright owners. From the article: 'The Order is surprising in light of last month's United States Supreme Court decision in Kirtsaeng v. Wiley & Sons, which reaffirmed the importance and applicability of the First Sale Doctrine in the United States of America.'" Redigi vows to appeal, and claims that the current version of their service is not affected by the lawsuit.

Comments

Let's look at this more closely

[bio_end_io_t]

Clearly the judge is a firm believer in piracy, else he wouldn't have made that ruling. Seriously though, people are trying to sell "used" mp3's?

Re:Let's look at this more closely

[Opportunist]

Hey, they're as good as new!

Re:Let's look at this more closely

[FireFury03]

Clearly the judge is a firm believer in piracy, else he wouldn't have made that ruling. Seriously though, people are trying to sell "used" mp3's?

Well why not? The media industry is selling time-unlimited licences to play an MP3 - that licence clearly has value, otherwise no one would be willing to pay for it. When you don't want to use it any more, why shouldn't you be able to reclaim some of the value by selling the licence on to someone else? The doctrine of first sale prevents vendors from preventing people from reselling physical goods, why shouldn't the same apply to anything which has value (such as a licence)?

Re:Let's look at this more closely

[kaizendojo]

I'd agree with you, except when you purchase an MP3 you are not actually 'buying a product', you are licensing it's use. In the law, there's a big difference. Next time, look a bit closer at that huge agreement you skip past on iTunes, Amazon and the like.

Re:Let's look at this more closely

[GIL_Dude]

You've nailed the key point. The fact of the matter is that the file (or copies of the file) should have no bearing on this case. The issue is the license (since you are licensing, not buying) and whether or not it should be transferable when it was likely specified in the fine print somewhere that it wasn't transferable. The whole "it isn't the same file when you transmit it to their server" is a red herring. I'd imagine the court case must have been brought against something pretty narrow in order for it to come down to a decision about the file (since the file should really be irrelevant to the use rights granted by the license). Maybe a higher court will need to figure this out and bring this out of the realm of technical issues and copies of files and get it back to the licensing of imaginary property.

Re:Let's look at this more closely

[mcgrew]

If I pay to download a song from iTunes or wherever, in what way is it false to call that a purchase of digital goods?

You didn't buy anything, you paid a fee to download a file.

I get to legally listen to the song, the same as if I had bought it on a CD. The physical CD was never what I was buying anyway.

Yes, it was. You don't own the songs on the CD, only the CD. Nobody owns a song, not even the copyright holder, who only holds a "limited" time monopoly on its publication. Buy the CD, rip it to MP3 and resell the CD. You're not breaking the law, since you didn't publish anything.

I really don't see why anyone was surprised at this ruling.

Re:Let's look at this more closely

[msauve]

It's not debatable, except in the sense that a lawyer will debate any POV, regardless of its validity. From 17 USC 1:

"Phonorecords" are material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

The temporal movement of bits to allow sound reproduction does not constitute "fixing." Note that there are specific restrictions on public performance, so a theater can't just buy a DVD and show that to a paying crowd.

"If I want to move an MP3 from one hard disk to another on my computer then I'm doing exactly the same. Am I not allowed to do this?"

Depends on the license you received with the MP3. Looking at the iTunes store terms (yea, they're technically not MP3, but this the the largest distributor, so good as an example):

(ii) You shall be authorized to use iTunes Products on five iTunes-authorized devices at any time...

(iii) You shall be able to store iTunes Products from up to five different Accounts at a time on compatible devices, provided that each iPhone may sync tone iTunes Products with only a single iTunes-authorized device at a time, and syncing an iPhone with a different iTunes-authorized device will cause tone iTunes Products stored on that iPhone to be erased.

(iv) You shall be authorized to burn an audio playlist up to seven times.

and Amazon

Upon payment for Music Content, we grant you a non-exclusive, non-transferable right to use the Music Content only for your personal, non-commercial, entertainment use, subject to the Agreement...you may not redistribute, transmit, assign, sell, broadcast, rent, share, lend, modify, adapt, edit, license or otherwise transfer or use the Music Content.

So, the both licenses allow you to make copies, to authorized devices and CDs (Apple), or "for your personal, non-commercial, entertainment use" (Amazon). You're also allowed to make a backup copy.

Re:Let's look at this more closely

[Zordak]

I haven't read the decision, but I can see a clear distinction between an MP3 and a CD. Copyright law is all about the act of copying something. Under copyright law, even loading a program into RAM from a disk constitutes "copying" (there is a special statutory exception that explicitly allows this if you are the legitimate owner of a copy of a program). The problem with MP3s is that you can't re-sell them without copying them, unless you purchased a physical disk of MP3s or something, in which case you could resell that disk.

In other words, whether or not you agree with current copyright laws, I believe the judge made the right decision under the laws as they exist. First sale applies to a physical object, but can't apply to digital stuff because reselling digital stuff necessarily requires making a copy.

Re:Let's look at this more closely

[hawguy]

Except CD's are drastically overpriced. Also, you have to deal with purchasing an entire disc for maybe only two songs you actually want to listen to. No, don't buy the CD if it isn't what you really want, because then you're supporting the mediocrity of the artists and the overpowered corporations behind them.

Amazon's top 3 in music today:

The 20/20 Experience - MP3: $10.99, CD : 11.47
Delta Machine: MP3: $14.99 CD $16.79
Based on a True Story: MP3: $9.49 CD: $9.99

Considering that the CD costs include shipping (super saver or prime), the CD doesn't seem overpriced considering that you get a physical object that you actually own and can resell.

If you don't have to have the latest albums when they come out, then you can buy used CD's, which typically cost less than the MP3, even with delivery costs included.

Re:Let's look at this more closely

[Frobnicator]

Read the decision. The decision itself is contrary to RIAA v Diamond. It also pushes against the Betamax decision.

In case you have forgotten, RIAA v Diamond is the lawsuit that declared MP3 players legal, (format shifting and space shifting) and Betamax enabled time shifting.

The judge makes this logic, which is flawed:

Whenever a digital file is transferred, it moves from one 'material object' to another 'material object'. Title 17 has mixed definitions about what that means, but one interpretation is that when a different 'material object' has the content placed upon it, that constitutes creating a copy, which is a protected right. He rules that it does not matter if the original data is destroyed or not, it is considered a new instance of the work and is a protected right.

In RIAA v Diamond, the court declared that logic unreasonable, saying: “any recording device could evade regulation simply by passing the music through a computer and ensuring that the MP3 file resided momentarily on the hard drive.”

According to this judge's interpretation, ANY transfer of data to a new 'material object' requires the blessing of the copyright holder. That means we cannot legally transfer our files to a second hard drive, since it is a new material object. We cannot legally transfer the files from a PC to a laptop, since it is a new material object. We cannot transfer files to a smart phone or tablet or other device, because they are different material objects. We cannot transfer data "to the cloud", because it is one or more new material objects.

This ruling will be remanded to the judge within a few months.

In some ways I think the judge is trolling or admitting that he has no clue. His background is narcotics law and money laundering (and rubber-stamping plea bargains for prosecuters). He has no real experience with IP law. He's probably just waiting for the appeals court to tell him what the ruling is supposed to be since he doesn't have any clue.

Copyright = right to control permission to copy

[blarkon]

Redigi's business model relies upon making copies. The Thai bloke was importing copies. He wasn't making copies.

Re:Copyright = right to control permission to copy

[Anonymous Coward]

But I dont Ctrl+C / Ctrl+V but I only do Ctrl+X / Ctrl+V! Honestly!

Re:Copyright = right to control permission to copy

[91degrees]

Right. No matter what the moral rights and wrongs of the case, the letter of the law is what matters here. You might be able to make an argument for fair use here but really we need a change in the law, and ideally a complete rethink of what rights the seller and buyer of digital media have.

Re:Copyright = right to control permission to copy

[firex726]

Technically you make a copy too when you play the file, it'll COPY it off the HDD and into your computer's or phone's RAM.

Re:Copyright = right to control permission to copy

[flimflammer]

That's the argument Blizzard successfully made to win a case against a popular bot. Was honestly somewhat amazed it worked.

Re:Copyright = right to control permission to copy

[blackraven14250]

Yeah, I don't think the judge realizes that computers don't work in the same way as physical good. You literally can't hand over the original, you have to copy and delete the original to "move" it.

Re:Let's see what happens

[Xest]

Not in Europe it wont thank god, seeing as we've already had a sane ruling in the opposite direction for software.

I'd say this will have no effect over here, but I'd be wrong. For some reason companies seem scared to death of setting up Europe only, or generally non-US only sites that offer services to people outside the US that are much wanted by users but forbidden by US law but not laws elsewhere. I guess at very least the US has been successful in scaring most startups/established companies into believing it really does have universal jurisdiction when it comes to laws relating to the digital world.

A Judge has sided with the richer party

[rodrigoandrade]

It's easy to understand the judiciary. Whichever party has the most money wins.

Now where's my law degree?

Re:Just plain wrong

[hackula]

Clearly this guy is simply a moron who does not have a clue about the subject matter. For example, his claim would forbid me from transferring a file over the internet to myself, but would allow people to indiscriminately transfer files over a network (your average college dorm or library contains millions of songs distributed across many computers). If he were to expand his definition to include local transfers, then you could not even copy a file from one directory to another.

Don't worry

[RDW]

Reselling media is only evil and wrong this week. It'll be absolutely fine, 'innovative' and mainstream as soon as Amazon, Apple or Google starts doing it:

http://www.zdnet.com/amazon-lands-patent-on-marketplace-for-selling-on-used-digital-content-7000010917/

http://appleinsider.com/articles/13/03/07/apples-digital-content-resale-and-loan-system-could-allow-drm-transfers-between-end-users

Re:1st sale doctrine

[cpt kangarooski]

First sale allows people to resell legally made copies. A copy is defined in the statute as a material object in which a work is fixed. Thus, a file on a computer isn't a copy, but the hard drive the file is written to is. You're free to sell the hard drive with the music on it, but not to reproduce the file over the network, regardless of whether you delete the local file or not. Basically, you can't move a copy -- a hard disc, a flash drive, etc. across the net. It's physically impossible.

Re:Ah the perils of the media business model

[JeanCroix]

Do artists who've been dead for three+ decades still need to get money from somewhere as well?