Selling MP3s is a Good Idea, Right? “No!” says the Court

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You can sell used CDs and used DVDs, and even, if you’re really old school, used records and tapes. So why not sell used MP3s that you don’t want any more. It may seem an obvious issue that an MP3 file can be copied again and again, but one company, ReDigi Inc., takes a different view of the issue, pointing out that the legal doctrine of “first use” allows purchasers of copyrighted material (such as songs on a CD) to resell them. Capital Records disagreed with ReDigi, and last October the two companies faced off in front of District Court Judge Richard Sullivan, in joint motions to dismiss the inevitable lawsuit that had been brought by Capitol Records. Last week Judge Sullivan ruled on the case, and chalked up one for the big guys.

First, to explain the issues:


ReDigi works essentially like a man-in-the-middle escrow service for digital music that resides in the original purchaser’s iTunes library. When the seller connects to the ReDigi service, ReDigi pulls the MP3 onto their server, and deletes it from the seller’s iTunes library. While on ReDigi’s server, the only people who can access the file are the seller, until the seller tells ReDigi to proceed with the sale and transfer the file to the buyer, and then the buyer. In this way, says ReDigi, the question of the seller selling a copy of the MP3 is addressed.

In the lawsuit, Capitol Records claimed that the doctrine of “first use” only applies to tangible, physical objects (books, records, etc.), and that a digital file is not a physical object.

ReDigi claims that their system makes an MP3 file the functional equivalent of a physical object.

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In his ruling against ReDigi and for Capitol Records on Saturday, Judge Sullivan opined, “The first sale defense does not cover this any more than it covered the sale of cassette recordings of vinyl records in a bygone era.”

This was not a huge surprise. However, what was a surprise, and a delightful one at that, was Judge Sullivan’s response to counsel during the arguments for the motions for summary judgement.

During the course of the arguments, an analogy to Star Trek was brought up. In part, Judge Sullivan said:

 

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.

Capitol’s attorney responded, “Right. And, you know, that’s part of the problem we have at a basic level because it’s not Star Trek here…”

To which the judge replied, “Wouldn’t it be cool if it were?”

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