Federal judge does NOT legalize selling “used” MP3s

Federal judge does NOT legalize selling “used” MP3s


There is a recent Federal judge’s decision that is getting some serious “through the looking glass” spin (as well as honest misinterpretation). I’d say the headlines are from Bizarro world, but I think two pop cultural references are enough on this. 😉

Let’s go through the basics on what is happening here and look at what the judge actually said…and what it might mean.

There is a website, ReDigi, that lets people resell “used” MP3s. It’s all done quite narrowly…the music is from iTunes, proof of ownership is part of it, and the person who sells it doesn’t still have access to it. It is understandably attractive to some people who bought music. You buy a tune for ninety-nine cents, and maybe resell it for thirty-five cents…lowers the effective cost considerably.

Capitol Records has objected, and is taking ReDigi to court.

The record company also asked the court for an injunction to stop ReDigi’s activities (as they relate to Capitol) while the case progresses.

Judge Richard J. Sullivan denied the injunction.

Some of the blogosphere interpreted this as the judge siding with ReDigi.

That’s actually pretty much the opposite of what happened.

According to this

transcript posted by Wired.com

the judge said the following (in part):

“I think likelihood of success on the merits is
3 something that plaintiffs have demonstrated. I should bear in
4 mind or at least repeat what the lawyers already know, which is
5 that that doesn’t mean that I’m finding that the plaintiffs
6 would win in this case, it’s just that they have demonstrated
7 that there are arguments that on their face look to be
8 compelling or potentially persuasive arguments. They have
9 certainly done a good job of articulating those based on the
10 statute, which I think covers that element.”

The plaintiffs in this case? Capitol Records.

The reason why a court would issue an injunction (which, in a sense, punishes someone who has not yet been found guilty) is if the accuser will suffer “irreparable harm” while the process is being settled.

In other words, the judge would issue an injunction if Capitol Records was not likely to be able to recover damages even if they win.

In this case, the judge felt that ReDigi is keeping good records, so that if they lose, there will be a specific accounting of what is owed to Capitol.

Let’s say that you have trees on your property that are more than a hundred years old. Another party is cutting down those trees. In that case, a judge might issue an injunction because, even if you win, those trees can’t be exactly replaced. You would suffer a loss that could not be repaired.

As another example: suppose you have a big movie that’s about to come out. Someone is distributing bootleg copies of your movie on the internet. That could hurt your box office in a way that could not be recovered. People might not go to your movie in the theatres, and there might be no way to stop those copies from circulating once they were out in the wild. That would be a reason for an injunction.

ReDigi is not distributing willy nilly. It’s carefully controlled. They are arguing that their customers have a legal right to do this.

If ReDigi wins, ReDigi would have suffered a loss by having their sales stopped while the case went on.

If ReDigi loses, Capitol would not have lost anything for which Redigi couldn’t compensate them.

The judge had to consider other factors than just the sales…would the market be confused by what was happening with ReDigi, and thus hurt Capitol?

The judge’s decision was that there was no irreparable harm in allowing ReDigi to continue until there is a legal decision.

Judge Sullivan also said:

“And as to the public interest, I think obviously the
21 public has an interest in seeing copyright law enforced. On
22 the other hand, that copyright law includes recognitions of
23 things like legitimate secondary markets and the ability of
24 owners to resell their items.”

So, the judge did not decide that re-selling MP3s was legal. The judge decided that there was no irreparable harm in allowing ReDigi to continue while the case continues.

Who will win in the court?

I know enough to know that it will depend on the arguments made. My own sense of it is that the First Sale Doctrine (which is what allows you to resell a copy of a paperbook you bought without getting permission from the rightsholder) doesn’t apply to a license (which is with what we are generally dealing in conjunction with digital content). In other words, it would surprise me if ReDigi won in court, but it could happen.

I think looking at the beginning of this article that I might be being too snarky in the intro. I think there are legitimate, thoughtful people who believe that the First Sale Doctrine does apply to licenses. I was reacting to people headlining something that doesn’t seem to me to be what the judge said…I thought that might be misleading.

I hope I’ve made the case a little clearer. I’ll be interested to see what happens as it goes forward.

* These are from 1984 by George Orwell. As you can tell, they reverse logic, but part of the argument of the book is that people can be swayed in some way by statements like that. In this case, I was (somewhat emotionally) seeing the “judge legalizes” as the opposite of what was the reality. In rethinking this, the judge didn’t say it was illegal either, so that is an exaggeration. However, I can see how “Ignorance Is Strength” applies to headlines that misrepresent the facts, so I’m leaving it. Feel free to let me know if you think I should have removed it…I’m a bit on the fence myself
This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

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