ReDigi case heads to court: Are we allowed to resell digital purchases or not?
By Joel Hruska on February 8, 2012 at 7:21 am
A few months back we covered the launch of ReDigi, a digital music store based on a business model of selling "used" digital tracks. The site in question claims that its software is capable of identifying music files legally purchased from iTunes and can remove a user's access to said music once the song has been sold through the company's online marketplace.
Capitol Records isn't buying it; the company sued ReDigi last month alleging that "ReDigi makes and assists its users in making systemic, repeated, and unauthorized reproductions and distributions of Plaintiff's copyrighted sound recordings… ReDigi is a clearinghouse for copyright infringement and a business model built on widespread, unauthorized copying of sound recordings owned by Plaintiff and others." In its filing, Capitol asked for a preliminary injunction against ReDigi and damages of $150,000 per track distributed.
The judge hearing the case, Richard Sullivan, refused to take the bait and has denied the request. There's no information on what Sullivan's opinions are on the situation, but the ReDigi suit could set important precedents for years to come. The Copyright Act of 1976 explicitly guarantees what's known as "first sale doctrine" — the idea that having purchased a good, the owner of said product has the legal right to resell it. The question of how first sale doctrine should be applied to digital products is very much a legal gray area.
Capitol's initial filing focuses heavily on the idea that ReDigi's service creates copies rather than attempting to claim that ReDigi is unable to guarantee that files have been properly identified and removed from the original owner's computer. The problem with this approach is that it's a legal loophole that the DMCA ironically closed. 17 U.S.C. 117(a) reads "it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided (1) that such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine." It's known as the Essential Step defense, and it was added to existing copyright law specifically to address the claim that loading a program into RAM was equivalent to creating an illegal copy of the software.
Whether ReDigi's concept of a "used" digital music market is sustainable or not, the legal issues it raises could have ramifications for a huge range of products, including games, movies, and software. Expect multiple heavyweights to weigh in if this case goes to trial — game publishers are rabid to kill the used games market, and a victory here would be a strategic move towards that goal.
ReDigi