April 3, 2013

Reselling ebooks may be copyright infringement

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Only weeks after the Supreme Court affirmed the First Sale doctrine for books bought overseas in Kirtsaeng vs. Wiley, a district judge has ruled that reselling digital copies is copyright infringement.

The case, Capital Records, LLC v ReDigi, was brought by the music label against the website ReDigi, which provided a platform through which legitimately purchased iTunes mp3 files could be resold. Although for physical CDs the First Sale doctrine, which allows people to gift, lend, or resell lawfully purchased items, applies, the Judge ruled that in the case of digital files, this integral feature of copyright law was not activated.

This was because, unlike giving away your record collection, the Judge said that ReDigi’s re-selling function was akin to copying the file.

ReDigi denied that they copied files, particularly because, as David Kravets‘ notes on Wired‘s Threat Level blog, “under ReDigi’s technology, the original uploaded file that is sold cannot be accessed by the seller any more through ReDigi or via the seller’s iTunes account.”

The Judge disagreed: “[i]t is beside the point that the original phonorecord no longer exists. It matters only that a new phonorecord has been created.”

As the Judge found that ReDigi effectively copied the music files, the First Sale doctrine did not apply. Judge Sullivan affirmed that First Sale only applies in cases of distribution (i.e. selling-on a physical copy) and does not apply to reproduction. And Capital Records still controlled the sole right to reproduce their songs.

This is a very worrying decision for future ebooks re-sales or lending. Per Kravets, “Saturday’s decision comes as online retailers such as Amazon and even Apple have patented platforms for the reselling of used digital goods such as books, music, videos and apps. Judge Sullivan’s ruling, if it withstands appellate scrutiny, likely means used digital sales venues must first acquire the permission of rights holders.”

For the moment, this decision applies only in New York, but it has problematic implications for future national decisions on this topic. The Register of Copyrights, Maria Pallante, called last week for wholesale overhaul of the United States’ copyright regime. This is desperately needed — the law as it currently stands bears no relation to the digital world it controls. As the Judge in this case concluded, “the Court cannot of its own accord condone the wholesale aplication of the first sale defense to the digital sphere, particularly when Congress itself has declined to take that step.”

 

 

Ariel Bogle is a publicist at Melville House.

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