ReDigi Causing Unrest

The used record store goes digital Music resale brings a digital showdown [pdf]

When Pete Brown got tired of his Don Henley album, he did what music fans have done for decades. He sold it.

But Brown’s version of the rock classic was digital. The 31-year-old liquor distributor from Indianapolis downloaded it from Apple’s iTunes music store and resold it on ReDigi.com, the Web’s first consignment shop for digital music, which a Cambridge start-up launched in October.

He earned a few bucks but may have broken the law in the process, though iTunes’s terms and conditions do not explicitly prohibit users from reselling their purchases. Capitol Records is suing ReDigi for allegedly violating copyright law and running a business “built on widespread, unauthorized copying of sound recordings.”

The case is making its way through federal court and is expected to determine the legitimacy of a secondary marketplace for these downloads. But it could also bring a landmark decision on how copyright law applies to digital albums, electronic books, and feature films that are downloaded on the Web, according to legal scholars.