Well, this week, a New York City federal court passed (partial) summary judgement against ReDigi [PDF], ruling that the service is liable for infringement. In doing so, the court strongly rejected ReDigi’s claims that their activities are covered under “fair use,” as well as the aforementioned first sale doctrine.
What does this matter to musicians? Well, first off, musicians are also music consumers. Second, creator compensation looks different in a used marketplace (typically nonexistent). ReDigi did supposedly hold a percentage of revenue from “used” sales in “escrow,” but it’s a bit fuzzy how this money would get to artists.
In this post, we’ll look at some of the legal factors involved in the court decision. You can tell us what you think in the comments.
[This post authored by FMC Legal Intern Joseph Silver]
The first sale doctrine within American copyright and trademark law has been getting a lot of attention in recent months. A number of federal circuit courts have touched upon this important copyright principle, which says that when a consumer purchases a good on the legitimate marketplace, the law affords them the right to lend, resell and dispose of that item (along with a number of other related uses). However, the first sale doctrine, also known as the exhaustion doctrine, does not permit a purchaser to reproduce, publicly display or perform the work, all of which are exclusive rights held by the copyright holder. Absent a “fair use” defense for consumers, those rules are pretty steadfast. Still, the first sale doctrine is an important limitation on copyright, which allows consumers who have lawfully purchased copyrighted goods to choose how the particular copy they purchased is distributed. This much remains settled. Yet two issues have recently arisen that aren’t so cut-and-dry: whether the first sale doctrine applies to digital goods and whether it applies to goods manufactured internationally.