November 15, 2011 7:07pm PT by Eriq Gardner
RIAA Attempts to Shut Down Second-Hand Digital Music Store
A big battle is brewing over whether or how the "first sale" doctrine in copyright law applies to digital music and movie files. Last week, the RIAA sent a cease-and-desist letter to ReDigi, an upstart company that lets users buy and sell "used" digital music.
Second-hand record stores have been around for long time, permissible because copyright law permits a purchaser of copyrighted material to transfer title to another buyer.
In the digital context, however, there's widespread debate about whether buying digital music constitutes a license or a sale, and what happens when music gets transferred, but ReDigi sniffs an opportunity. If blessed by courts, the enterprising outfit may have stumbled upon a game-changing business. Understandably, the RIAA isn't happy about this.
In a cease-and-desist letter sent on November 10, the trade organization says ReDigi has made "unauthorized use" of sound recordings.
The RIAA describes why the "first sale" doctrine doesn't apply here:
"That provision permits the owner of 'a particular copy or phonorecord lawfully made under this title' to sell that particular copy. It does not permit the owner to make another copy, sell the second copy and destroy the original. Thus, even if ReDigi's software and system works as described by ReDigi (i.e. that it deletes the original copy before it makes the sale), ReDigi would still be liable for copyright infringement."
The RIAA is demanding it stop infringing activities, quarantine any copies against further exploitation, remove from its website all references to names and likenesses of artists signed to RIAA members, and provide an accounting of all sales achieved and revenue generated. The RIAA is also threatening the company with a lawsuit for maximum statutory damages for willful infringement, as high as $150,000 per work.
Last year, the 9th Circuit Court of Appeals discussed "first sale" doctrine in regards to a vendor that had hoped to re-sell used CD-ROM software on eBay and found that purchasers are licensees of copies and subject to significant transfer restrictions. Some lawyers in applying the decision to the latest dispute still believe that ReDigi is on "fairly solid legal ground," but many other observers are adamant that ReDigi would need licensing permission before reproducing a copy for a buyer.
ReDigi says it doesn't intend to publicly comment on the RIAA's position, but told Ars Technica that "ReDigi is a strong ally to RIAA and copyright holder, anti-piracy initiatives by providing an elective tool for people to remove previously pirated music from their devices, thereby helping significantly reduce the number of pirated tracks in the music ecosphere."