The Federal District Court in New York has ruled that the resale of digital music infringed the copyrights held by the music rights-holders’ in Capitol Records LLC v. ReDigi Inc, U.S. District Court, Southern District of New York, No. 12-00095.
The Defendant ReDigi provided a service allowing purchasers of songs from iTunes to upload their music to ReDigi’s server in order to sell or exchange the digital music purchased from Plaintiff Capitol Records. ReDigi received a portion of the fee generated from the transaction. The Court decided that unlike material objects such as CDs, DVDs and books, digital content was non-transferable as it was incapable of being placed in the stream of commerce without copying. Likening it to a phonorecord, the Court said it mattered little that the original was destroyed if a new one was created. Therefore the First Sale Doctrine allowing for the resale of purchased material items did not apply.
The case dealt a blow to those embracing a secondary market for digital purchases. Their position argued that unlike goods embodied in a tangible medium of expression, such as a CD, digital goods were not copies subject to copyright law. Therefore, any transfer by the first sale owner fully relinquishing the right to the music file on a cloud-based server did not result in copyright infringement. As it’s likely that this case will be appealed to the 2nd Circuit, stay tuned for further developments.
