Digital Reselling. Remember (1) You Don’t Own Anything; and (2) Have to Buy Everything From Me.


The name of the article in thin the New York Times is: Reselling of Music Files Is Contested 

Songs on the service, which is based in Cambridge, Mass., cost 79 cents, as much as 50 cents less than the price of new tracks at iTunes. ReDigi users also get coupons worth 20 cents for each song upload for sale, effectively reducing the cost of a track to 59 cents. ReDigi’s fee ranges from 5 to 15 percent, a spokeswoman said.

A new company by the name of Re Digi is attempting to bring the concept of the used vinyl record store into the digital age. I hope they are successful, and that they have a very large litigation budget.  Funny how there were never any issues with used video games, records, and compact discs, but a digital file!  Heaven forbid you should attempt to resell a legal digital copy.  The music industry argument is that in order to transfer a digital file you must “copy” it, and therefore it is infringing.  Although not specifically stated in the article this is sure to be accompanied by “these files were licensed and not sold, and the transfer violates the license agreement.”  Far too many courts have bought this argument and essentially delegated Congressional authority in the Copyright Act to any particular company who drafts a license agreement.  The Copyright Act provides for the first sale doctrine, or that once a particular copy is lawfully sold the copyright owner no longer has control over that copy. Ordinarily when a contract conflicts with a statute, the statute wins.

The first-sale doctrine is a limitation on copyright that was recognized by the Supreme Court of the United States in 1908 (see Bobbs-Merrill Co. v. Straus) and subsequently codified in the Copyright Act of 1976, 17 U.S.C. § 109. The doctrine allows the purchaser to transfer (i.e., sell, lend or give away) a particular lawfully made copy of the copyrighted work without permission once the copyright owner has been paid value for the same. This means that the copyright holder’s rights to control the change of ownership of a particular copy ends once ownership of that copy has passed to someone else, as long as the copy itself is not an infringing copy.

If the first sale doctrine does not apply to digital files, you the consumer will end up paying a lot more. Under the music industry theory you have merely rented the music on your iPod.  As with any rental, you can only use it in a limited way, and all rentals come to an end. It makes me laugh when no one seems to understand the implications of “the cloud.”  You won’t even have a digital copy of your software, music, or movies, as you will only access them from a remote server. The end game is to force you to pay a subscription to access any and all copyrighted works, and to eliminate any resellers.  Don’t want to upgrade your windows XP for an operating system that does not work for you? Too bad, because it has already been updated on the remote server.  Thank you for your monthly payment.      

About Timothy Powers O'Neill

Timothy O’Neill, an attorney with the firm of Cohen Norris practices in the areas of business litigation, real estate litigation, and intellectual property litigation. Timothy received his Bachelor of Science Degree from the University of Evansville and graduated from the University of Missouri-Columbia School of Law in 1997. Following law school, Timothy clerked for two years in the State of Florida's Fifteenth Judicial Circuit in Palm Beach County, and served as a law clerk in the United States District Court for the Southern District of Florida. Timothy serves as an executive board member of the Busch Wildlife Sanctuary, a non-profit entity dedicated to preserving Florida’s wildlife through rehabilitation and education. Timothy is admitted to practice before all of the state courts of Florida as well as: The Supreme Court of the United States; United States Court of Appeals, Eleventh Circuit; United States Court of Appeals, Ninth Circuit; United States District Court, Southern District of Florida; United States District Court for the Middle District of Florida, United States District Court of Colorado, and is a member of the Palm Beach County, Florida, and Federal Bar Associations.

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