An American court has begun hearing a legal challenge calling for the right to sell digital music files as “used” goods. The case centers on how licensing laws for physical goods apply to virtual products.
EMI has brought the case against ReDigi, a site that allows users who’ve legally purchased music in digital form to sell it on to somebody else. Users can only sell songs they’ve bought from iTunes or ReDigi itself: they can’t sell tracks they have ripped from a CD.
Users must install special software to manage the music they sell. When they sell a song, the software verifies that it was legally purchased, then deletes the file from their computer before crediting their account with the money. The company says the software stops users from making a copy of the song, selling it, then reinstalling it. If they do this, their account is cancelled.
EMI began legal proceedings in February, though a judge refused its request for an injunction to stop ReDigi selling its tracks until the trial and verdict.
There are several different points of legal contention about the technicalities of the way the site works. The main principle at stake however is a possible conflict between copyright law and licensing arrangements.
ReDigi believes its operation is legal because of the first sale doctrine. That’s the principle that a copyright holder only has the right to control the original sale of a product. Once somebody legally purchases a product containing copyright material, they have the right to resell it, hence the fact that used CD and book sales are legal. Although exceptions exist to ban rentals of records and software such as video games, these don’t affect resales.
EMI believes first sale doctrine only applies to physical products and isn’t relevant here because the seller doesn’t literally handover the file to the buyer: instead ReDigi deletes the seller’s file and then makes a copy of a file in its own database to transfer to the buyer.
EMI also maintains that it retains the exclusive rights to make and distribute digital copies of the music produced by its artists and that other firms (such as Apple) can only do this under license.