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February 9, 2012
Could There Be A Legal Secondary Market for MP3s?
The Cartel would like to say "No!" However, a New York judge has said "Maybe." And "Not so fast!"
Quick recap: "First Sale Doctrine" is a uniquely American exemption to copyright, which says that if you legally bought a copyrighted work you are permitted to resell it. The exemption has been narrowed in recent years and it's interesting that this ruling was made in the Second Circuit, which we learned last September had issued a horrible ruling blowing a huge hole in first sale for books. Other cases have attacked first sale as applied to used video games, CDs/DVDs, and other electronic media.
The case at hand, as reported by David Kravets for Ars, has been filed against the company ReDigi a new start-up that began operating late in 2011. The company bills itself as a "modern" used-music store, which allows people to list for sale (or seek to buy) lawfully purchased iTunes MP3s.
ReDigi appears to have gone to some lengths to shield itself from becoming a platform for unfettered (and probably illegal) trading. For example, you can't rip tracks off your CD and list them there. In Kravets's WIRED piece on the start of the lawsuit he details a bit more of how the company works to ensure that only one registered digital copy of a track is made and kept. Once you put the tune up you can't access it on your iTunes anymore and once the buyer has paid, no copy of the track remains in the store's servers.
Of course none of this is good enough for the Cartel, but what else is new.
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