Music Fans Aren't Owners? Court Finds Redigi Music Resale Service Infringes Copyright

In a blow to the future of the first sale doctrine—the law that protects your ability to lend, sell, or give away your copy of books, music and other copyrighted works—a federal court held today that the Redigi music service, which allows music fans to store and resell music they buy from iTunes, violates copyright law. According to the court, when it comes to music, you may have bought it, but you don't own it, at least if the "it" is an mp3 file rather than a CD.

What is particularly frustrating is that the court reached that decision despite the fact that Redigi went out of its way to prevent actual harm to any copyright owner.  Here’s how the service works: customers download Redigi software and designate files they want to resell. Redigi's software checks to make sure the files came from iTunes (so it knows they were lawfully purchased), pulls the data files from the reseller's computer to cloud storage, and deletes them from the reseller’s hard drive.  Once the music is in the cloud, other Redigi users can buy it. When a purchase is made, Redigi transfers ownership of the file and the seller can no longer access it.

So, the seller gets rid of her copy, and the buyer picks it up. Isn't that what the first sale doctrine is all about? No, said the court. The first sale doctrine simply doesn’t apply to digital goods, because there is no way to “transfer” them without making copies.  When users upload their music the cloud, they are making a copy of that music, whether or not they subsequently (or simultaneously) delete it from their own computers, and the first sale doctrine doesn’t protect copying, only distributing.

Many of us “buy” music, movies, books, games etc. in purely digital form, and this is likely to be increasingly true going forward. But under this ruling the laws we count on to protect our right to dispose of that content could soon be as obsolete as the VHS tape.  The court recognized as much but concluded that it was someone else's problem: 

[The first sale doctrine] still protects a lawful owner’s sale of her “particular” phonorecord, be it a computer hard disk, iPod, or other memory device onto which the file was originally downloaded. While this limitation clearly presents obstacles to resale that are different from, and perhaps even more onerous than, those involved in the resale of CDs and cassettes, the limitation is hardly absurd – the first sale doctrine was enacted in a world where the ease and speed of data transfer could not have been imagined. There are many reasons . . . for why such physical limitations may be desirable. It is left to Congress, and not this Court, to deem them outmoded.

Redigi may appeal. If so, let's hope it finds a better reception in a higher court. If not, it may be time for Congress to step in and bring the first sale doctrine into the 21st century.