Tag Archives: record store

Reselling MP3s? RiDigi-lous, Judge Rules

“They took the credit for your second symphony. Rewritten by machine on new technology.” “Video Killed The Radio Star” by The Buggles.

I’ve spent many happy hours browsing through the bins of second-hand record stores. Used LPs and CDs–some rare, some foreign, some familiar, all at bargain prices–what’s not to like? And all made possible by a provision of U.S. Copyright law called the “First Sale Doctrine.” That’s the same First Sale Doctrine that the Supreme Court recently interpreted in Kirtsaeng v. John Wiley & Sons, which was the subject of a post on this very blog. In that case, the High Court applied the First Sale Doctrine to textbooks purchased abroad and shipped to the States for resale here. The First Sale Doctrine also applies to recorded music, or what the Copyright law calls “phonorecords.” Under the doctrine, when you pay for a record, a cassette, or a cd, you have the right to do what you wish with it–play it endlessly, use it as a coaster or doorstop, and sell it to others. And you can do all that without getting permission from the copyright owner. The first sale “exhausts” the copyright, leaving the purchaser free of copyright restrictions if he or she tires of it and wants to sell it. But making more copies is another story– the First Sale Doctrine does not permit that. If it did, we could all go into the record business, copying our Beatles and Mumford and Sons CDs for fun and profit.

But the music business has changed–as we all know from the explosion of iPods, iPhones, Androids, and The Cloud. Today, many, if not most, music consumers get their music digitally, in the form of MP3s. So does the First Sale Doctrine apply in the new digital frontier?

That’s the issue that a Federal Court grappled with in the case of Capitol Records v. ReDigi Inc. As NPR reported today “ReDigi is basically a digital version of a used-record store. You can sell the company your old MP3s, and you can buy “used” MP3s that other people have sold. ReDigi says its technology ensures that the person selling a used MP3 can only sell it once and can’t keep listening it after it’s been sold.” In ReDigi’s view, the First Sale Doctrine should be an equal opportunity provision that protects ReDigi as much as it protects the Record Annex in you local strip mall.

Capitol Records wasn’t buying ReDigi’s tune. In the lawsuit, it argues that MP3’s aren’t the same as records and cds. According to the record company, you can’t transfer an MP3 without making a new copy–and doing that is no different from copying a CD or LP and reselling it–it’s copyright infringement, the label contends.

According to NPR, the case raises such existential questions as:
“Do you really own something if it’s just a bunch of ones and zeroes on your computer? If you take a digital song and you move someplace else, did you actually move it or did you just make a copy and destroy the original?”

To answer these vexing questions, the court boldly went where few courts have gone before, to Star Trek:

THE COURT: I kept thinking about this, but — I’m not a Trekkie, but I kept thinking it’s the difference from Captain Kirk going from the Enterprise to the planet through that transporter thing, where he’s not duplicated, to the cloning where there’s a good and a bad Captain Kirk where they’re both running around. I think one is a copy and the other is — the other was transported and it’s only one Captain Kirk.

MR. MANDEL: Right. And, you know, that’s part of the problem we have at a basic level because it’s not Star Trek here, and I don’t think they’re really saying —

THE COURT: Wouldn’t it be cool if it were?

Ultimately, the Court sided with Capitol Records, ruling the First Sale Doctrine doesn’t apply to ReDigi because the digital music files it handles don’t just change hands like a CD, but are copied.

The judge did not categorically rule out the First Sale Doctrine for digital works; he concluded however, that
the doctrine only protects the sale of that ” ‘particular’ phonorecord, be it a computer hard disk, iPod, or other memory device onto which the file was originally downloaded.” As NPR put it “in other words . . . you can sell your old MP3s — as long as you sell them along with whatever device you used to download the MP3s in the first place.”

ReDigi plans to appeal the ruling. They also say they’ve got the new technology that solves their First Sale problem.

So stay tuned–perhaps there will be a secondary market for MP3s after all. Then, someone will have to invent a way to replicate the joy of browsing through dog-eared LPs while inhaling the musty air of a brick and mortar second-hand record store. That challenge might stump even Mr. Spock.

QUOTE OF THE DAY: “Now Mr. Spock, there’s really something about all this that I don’t understand, so maybe you could explain it to me, logically of course…” James T. Kirk, Star Trek.

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