Redigi Loses Round One

After last year refusing to shut down Redigi on the Cartel's say-so, Manhattan District Judge Richard Sullivan has handed a win to Capitol Records on almost all counts. Sullivan's decision (PDF here) is a grant of summary judgment after oral arguments on the motions were heard last October.

(thanks to Doug Pardee for the pointer to the decision PDF)

Sullivan's ruling appears to rest on his belief that Redigi in fact creates new copies of the digital files, despite its efforts to avoid doing so. Creating a new file would of course be an infringement and thus would not invoke the first-sale rights. The Reuters story indicates that Sullivan's ruling takes this into account - specifically Kirtsaeng - but the question still remains. If Redigi can attack the core conclusion of making a copy, they may still be able to operate under first-sale doctrine.

Unfortunately, Redigi does not have big-name deep-pockets backers like Aereo so if they are going to continue this fight it's going to be an expensive proposition. At press time they weren't revealing their next move, but honestly they're going to be on the hook for big bucks no matter what since Capitol is sure to press for large damage sums at this point.