(c/o MM)
Online Market for Pre-Owned Digital Music Hangs in the Balance
• By David Kravets
• http://www.wired.com/threatlevel/2012/02/pre-owned-music-lawsuit/
• February 2, 2012 |
• 6:22 pm |
• Categories: intellectual property, The Courts
The future of a one-of-a-kind website enabling the online sale of pre-owned
digital-music files is in the hands of a federal judge.
ReDigi, which opened in October, provides account holders with a platform to
buy and sell used MP3s that were purchased lawfully through iTunes. The
platform’s technology does not support other music.
Among other points, the case weighs the so-called first-sale doctrine, the
legal theory that people in lawful possession of copyright material have the
right to sell it.
A federal judge sided with that principle in 2008, when it debunked UMG
Recordings’ claim that it retained perpetual ownership of promotional CDs it
releases before an album’s debut. Last year, however, a different court ruled
against now-defunct online service Zediva, which streamed movies to customers
via DVDs that Zediva had purchased.
In the ReDigi case, Capital Records sued the Massachusetts-based startup last
month in New York federal court. Claiming ReDigi was liable for contributing to
copyright infringement, the label is demanding U.S. District Judge Richard
Sullivan immediately order ReDigi to remove Capital-owned material, and to also
award damages of up to $150,000 per track against the startup.
A ruling could come any day.
Larry Rudolf, the 15-employee company’s chief technology officer, seemed
confident of the outcome.
“We let others sit around biting their nails,” he said in an e-mail.
Capital appears equally as confident. It told Judge Sullivan that ReDigi is not
the “equivalent of a used record store,” as ReDigi claims.
“ReDigi is actually a clearinghouse for copyright infringement and a business
model built on widespread, unauthorized copying of sound recordings owned by
plaintiff and others. Plaintiff brings this lawsuit to halt defendant’s ongoing
infringement of plaintiff’s copyrighted works and to recover damages for the
harm caused by defendant’s activities,”(.pdf) Capital attorney Richard Mandel
wrote.
ReDigi explained to Sullivan in court papers that its undisclosed number of
account holders have a right to upload their purchased iTunes files into
ReDigi’s cloud. And when a file is sold to another ReDigi account holder, no
copy is made. What’s more, because of 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.
“ReDigi’s structure ensures that no copies of an Eligible File are made when
one ReDigi user sells an Eligible File stored in the user’s Cloud Locker to
another ReDigi user through the ReDigi Marketplace,” its attorney, Ray
Beckerman, wrote ina court filing. (.pdf) ”When such a file is purchased by
another user, the file pointer associating the Eligible File with the seller’s
Cloud Locker is modified to associate the file with the purchaser’s Cloud
Locker. In such a transaction only the pointer is changed; the Eligible File
remains in the same location in the ReDigi Cloud and is not copied.”
Beckerman, in a telephone interview, said ReDigi does everything it can to
block the unauthorized duplication of files in the ReDigi marketplace.
Beckerman added that ReDigi’s technology cannot stop customers from file
sharing or copying iTunes music purchases before they had uploaded them to the
service.
“You can’t stop the world from committing copyright infringement,” he said.
“But it’s impossible to infringe through ReDigi.”
Prices for songs vary on ReDigi, with some files having asking prices as high
as 87 cents. The company, which earns up to 15 percent per sale, also offers
cloud-storage music streaming.
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Just because i'm near the punchbowl doesn't mean I'm also drinking from it.
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