First-Sale Doctrine Has Limits.

While the U.S. Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons Inc. expanded the scope of the first-sale doctrine, a federal judge in New York confirmed that limits still exist, particularly in the music industry.

The case involved the sale of so-called “used music.” ReDigi Inc. operates what it calls a “virtual” marketplace for “pre-owned” digital music. After its songs were resold on the site, Capitol Records, LLC filed a copyright infringement lawsuit. ReDigi responded by asserting that its operations were protected under the first-sale doctrine.

In deciding a motion for summary judgment, U.S. District Judge Richard Sullivan sided with the record company, finding that “the first-sale defense is limited to material items, like records, that the copyright owner put into the stream of commerce.” He further added, “The first-sale defense does not cover this any more than it covered the sale of cassette recordings of vinyl records in a bygone era.”

As Sullivan explained in his opinion, a copyright owner’s reproduction rights include “the exclusive right to embody, and to prevent others from embodying, the copyrighted work (or sound recording) in a new material object (or phonorecord).” Sullivan rejected ReDigi’s argument that no copying occurs because users transferred the same files from their computers to the company’s online marketplace. As he noted,  “when a user downloads a digital music file or ‘digital sequence’ to his ‘hard disk,’ the file is ‘reproduce[d]’ on a new phonorecord within the meaning of the Copyright Act.”

“This understanding is, of course, confirmed by the laws of physics,” the judge wrote. “It is simply impossible that the same ‘material object’ can be transferred over the Internet. … Because the reproduction right is necessarily implicated when a copyrighted work is embodied in a new material object, and because digital music files must be embodied in a new material object following their transfer over the Internet, the Court determines that the embodiment of a digital music file on a new hard disk is a reproduction within the meaning of the Copyright Act.”

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

One thought on “First-Sale Doctrine Has Limits.

  1. Pingback: Supreme Court Rules “First Sale Doctrine” Applies to Goods Made Abroad | businessandip

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