One of my favorite things to do is to browse a used book store. I almost always find out-of-print books that I never knew could be so interesting. Same goes with buying used LPs. Yes I have some Luddite left in me…
Such browsing can also be done online. However, one is not likely to be able soon to browse a used digital music store. Here is why…
A federal court, the Southern District of New York, held on March 30 in Capitol Records v. ReDigi that the first sale doctrine does not authorize the lawful owner of a digital music file to resell it, even if only one file exists before or after the transfer.
Plaintiff in this case was Capital Records, which owns the copyright in many recordings. The defendant was ReDigi, which, according to its site, is the “World’s First Pre Owned Digital Marketplace.” It describes itself as being a “free cloud service that allows you to sell your legally purchased digital music.”
This is how it works, or worked. A ReDigi user is able to upload his legally purchased digital music files to a remote server, ReDigi’s “Cloud Locker.” The files are stored, and are available to the user for streaming, but he may also elect to sell one or more files. In that case, he can no longer access the digital file which was sold, and exclusive access to this file is transferred to the user who purchased it ‘used.’
The main issue in this case was whether a ReDigi user “migrates” a digital music file when uploading it to the ReDigi server, or if he makes a copy of it. This was important because, under the Copyright Act, the owner of a copyright has the exclusive right to reproduce, distribute or perform the copyrighted work. Also, Section 106(1) of the Copyright Act gives the owner of the copyright the exclusive right “to reproduce the copyrighted work in copies or phonorecords.”
Is transferring a digital file from a hard drive to a server copying that file?
Under Section 101 of the Copyright Act, a ‘phonorecord’ is the material object in which the sounds are fixed by any method.
“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 term “phonorecords” includes the material object in which the sounds are first fixed.
In this case, the copyrighted work is the digital music file, and the “phonorecord” is the segment of the hard disk where the file is embodied.
ReDigi’s system aims at preventing illegal copying. First, it does not allow music files illegally downloaded or copied from a CD to be sold on its site. It acknowledged, however, that the program it uses to detect illegal copying cannot detect copies stored in other locations than a user’s hard drive. ReDigi’s “Media Manager” program, which users must install on their computers, can, however, detect if a copy of a digital file uploaded on ReDigi remains on a user’s hard drive. In that case, ReDigi contacts the user and asks that the file be deleted. Not doing so may lead to the account being terminated.
ReDigi argued that a user does not copy the musical file he originally had acquired legally, but merely “migrates” it, and thus it is the same file that is transferred from the hard drive of the ReDigi’s user to the ReDigi’s server, and then is eventually sold to another ReDigi user.
The Court was not convinced, finding instead that a reproduction occurs each time a user uploads a digital file into ReDigi’s server. It noted that “[i]t is beside the point that the original phonorecord no longer exists. It matters only that a new phonorecord has been created.”
The Court reasoned that the copyrighted work, fixed in a phonorecord, is copied if it is fixed in a new material object, and therefore the plaintiff’s copyright was infringed each time a digital music file of which Capital Records owns the copyright was uploaded into ReDigi’s server.
The First Sale Doctrine Defense Does Not Excuse the Infringement
ReDigi asserted a first sale defense, but the court disagreed.
Under the first sale doctrine, the owner of the copyright cannot prevent the legitimate owner of a book or a phonorecord protected by copyright to resell or to give it away. That is the federal law which authorizes us to sell or to give away our books, our CDs, and our DVDs. Once the owner of a coypyrighted work has placed it in the stream of commerce by selling it, he has exhausted his exclusive right to distribute the work.
The doctrine was originally recognized by a court in 1908, and has been codified in the 1976 Copyright Act.
Under its section 109(a):
“the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”
But the first sale doctrine could not be used as a defense, according to the Court, because ReDigi’services infringed Plaintiff’s reproduction right. Additionally, the first sale doctrine could not be a defense in this case, as it is only a defense if plaintiff claims a violation of his right to distribute.
Also, according to the Court, the first sale doctrine could not protect ReDigi as it only protects the legitimate owner of a copy or a phonorecord, and the digital music files sold on ReDigi’s site were not lawfully made under the Copyright Act.
Here is what the court said:
“Here, a ReDigi user owns the phonorecord that was created when she purchased and downloaded a song from iTunes to her hard disk. But to sell that song on ReDigi, she must produce a new phonorecord on the ReDigi server. Because it is therefore impossible for the user to sell her “particular” phonorecord on ReDigi, the first sale statute cannot provide a defense. Put another way, the first sale defense is limited to material items, like records, that the copyright owner put into the stream of commerce.”
It looks like we may not be able to resell the digital music we fell out of love anytime soon…
Image is 174/366 courtesy of Flickr user irrezolut pursuant to a Creative Commons CC BY-SA 2.0 license.
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