Mass Law Blog

Redigi Settles on Damages, Likely Heads to Second Circuit

by | Apr 7, 2016

A quick update on Capitol Records v. Redigi.

The SDNY federal court entered summary judgment against Redigi on liability in March 2013.

The last two years have been spent preparing for trial on damages.

However, on Monday of this week, on the eve of trial, the parties reported the case settled.  Very likely, this settlement (which is confidential), was engineered to allow the decision on liability to be appealed to the Second Circuit. The way this works is that if the appeal is unsuccessful, the defendants will owe a certain amount of money (stipulated in the settlement agreement, which is confidential/non-public).  If Redigi wins on appeal, it will not owe that money (and, presumably, it will be able to resume offering its service, which appears to be inactive at present).  The settlement agreement likely provides for either outcome.

It has always been the expectation that Redigi wanted to get this case to the Second Circuit, so I believe this is likely to be the scenario that is in progress, particularly since there is no permanent injunction issued pursuant to the settlement.  However, without seeing the settlement agreement (or seeing a Notice of Appeal filed by Redigi), we can’t be 100% certain that the case will go to the Second Circuit.

Stay tuned ….

Update: The trial court decision was affirmed by the Second Circuit in 2018.  See Redigi – World’s First Used Digital Marketplace – Fails “First Sale” at Second Circuit