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Redigi Case Poses A Novel Copyright Question on the Resale of Digital Audio Files – Is “Digital First Sale” Legal?

You know all those used music stores you used to love to go to back in the day when you bought music on CDs?  You could browse through used CDs and buy them for less than retail.  Maybe you still do (kudos to Deja Vu Records in Natick, Mass.).  Of course, you can do the same thing online.

The founders of Massachsetts-based Redigi figured, why can’t we create a marketplace that will allow people to do the same thing with their digital music files?  Or, as Redigi puts it: ” Sell your old songs legally – The world’s first used digital music marketplace – Buy used music insanely cheap”.  However, in starting this business Redigi may have run smack into the disconnect between the U.S. copyright statute and digital media.  And, it has been forced to defend against a full-on assault by the RIAA  (in the form of its apparent designee, Capitol Records).

Redigi’s service launched in October 2011, and by reason of the sheer chutzpah of its business model the copyright industry (the usual ragtag collection of lawyers, industry types, bloggers, reporters and hangers-on) was soon debating the legality or illegality of its service. By early November Redigi was holding a “roll over and die” letter from the RIAA. By early January 2012 Capitol had filed suit against Redigi in the Southern District of New York.

Issue was joined quickly when Capitol filed a motion for preliminary injunction seeking, in effect, to shut Redigi down and end the case with a single, crushing legal blow.  The district court denied the motion, so Redigi remains alive for now.  However, the case is on a fast track – Capitol and Redigi have waived a jury trial, and the parties will be filing summary judgment motions this summer.  The case is likely to be resolved before the end of the year, at least in the trial court.


Defendant Choses a New Trial in Minnesota File Sharing Case

Defendant Choses a New Trial in Minnesota File Sharing Case

When I wrote about the trial judge’s remittitur order in the Jamie Thomas case last week, I didn’t mention that a legal aspect of remittitur is that the plaintiff may accept it, or reject it and demand a new trial. I now understand that the plaintiff in this case has not accepted the judge’s remittitur, and has informed the court that it elects instead to proceed with a new trial. This would be the third trial in this case, since the first was set aside by the judge following verdict.  Obviously, this decision is a matter of principle, not finances, since the cost of the new trial alone will likely exceed the damages offered by the judge. However, this case, like the Tenenbaum case in Boston, is all about principle, and very little about hard, cold cash.

There’s an interesting discussion of remittitur on the Copyrights and Campaigns web site, here.

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“$2 Million for Stealing 24 Songs for Personal Use is Simply Shocking” Says Minnesota Federal Judge, Issuing Remittitur Order

Out of more than 30,000 cases filed against downloaders by the record companies only two end-user download cases have gone to trial and judgment: the Tenenbaum case in Boston, and the case against Jammie Thomas-Rassett in Minnesota.

In the second case, the jury awarded the copyright owners $2 million for downloading (and allegedly distributing) 24 songs.  The federal judge to whom the case is assigned has now lowered that amount to $2,250 per song (the legal term of the judge’s action is “remittitur”).

Some quotes from the Thomas-Rassett January 22, 2010 decision:

After long and careful deliberation, the Court . . . remits the damages award to $2,250 per song – three times the statutory minimum. The need for deterrence cannot justify a $2 million verdict for stealing and illegally distributing 24 songs for the sole purpose of obtaining free music. . . . although Plaintiffs were not required to prove their actual damages, statutory damages must still bear some relation to actual damages.

. . .  This reduced award is significant and harsh. It is a higher
award than the Court might have chosen to impose in its sole discretion, but the decision was not entrusted to this Court.

. . . Thomas‐Rasset argues that the ratio of the statutory damages award to actual damages in this case, when measured in songs, is 1:62,015. She bases this calculations on a cost of $1.29 per song online.

. . .  Thomas‐Rasset asserts that, at most, she was a single mother who merely downloaded and shared music when she had already lawfully bought CDs of much of that music and had no commercial motive to infringe.

. . .  The need for deterrence cannot justify a $2 million verdict for stealing and illegally distributing 24 songs for the sole purpose of obtaining free music.

. . .  The Court will not substitute its judgment for the judgment of the jury. Rather, it will remit the award to the maximum amount sustainable by the record, so that the statutory damages award is no longer shocking or monstrous.

It will be interesting to see if this decision has any impact on Judge Nancy Gertner, the federal judge assigned to the Tenenbaum case in Boston.  In that case, the jury awarded $22,500 for each work infringed, and a motion for remittitur is pending.

Here is a link to the full opinion in Thomas-Rasset:

Thomas-Rasset Remittatur Order

Tenenbaum Final Judgment

Tenenbaum Final Judgment

Update: Link to First Circuit’s Decision Rejecting Constitutional Grounds for Reducing Statutory Damages, issued September 16, 2011.


Final judgment in Sony v. Tenenbaum entered by Judge Nancy Gertner today.  The 30 day appeal clock starts to run.  Should be interesting to see what the First Circuit does with this one, although I suspect that the betting is heavy in favor of quick affirmance.

A few choice quotes from Judge Gertner’s opinion, which is provided in full below on

“the Court, deeply concerned by the rash of file-sharing lawsuits, the imbalance of resources between the parties, and the upheaval of norms of behavior brought on by the Internet, did everything in its power to permit Tenebaum to make his best case for fair use.…The Court did what it could to focus the issue, notwithstanding what can only be described as a truly chaotic defense.”

Tenenbaum “tailor[ed] his fair use defense to suggest a modest exception to copyright protections,” he “mounted a broadside attack that would excuse all file sharing for private enjoyment. It is a version of fair use so broad that it would swallow the copyright protections that Congress created, defying both statute and precedent.”

“As this Court has previously noted, it is very, very concerned that there is a deep potential for injustice in the Copyright Act as it is currently written. It urges – no implores – Congress to amend the statute to reflect the realities of file sharing. There is something wrong with a law that routinely threatens teenagers and students with astronomical penalties for an activity whose implications they may not have fully understood. The injury to the copyright holder may be real, and even substantial, but, under the statute, the record companies do not even have to prove actual damage. “Repeatedly, as new developments have occurred in this country, it has been Congress that has fashioned the new rules that new technology made necessary.”  … It is a responsibility that Congress should not take lightly in the face of this litigation and the thousands of suits like it.”

The full opinion, below.

Tenenbaum Final Judgment

And Judge Gertner’s opinion rejecting Joel Tenenbaum’s fair use defense:

Sony v. Tenenbaum Fair Use Decision

First Circuit: Judge Gertner, You Do Not Have the Authority to Permit Webcasting in Your Courtroom

The First Circuit’s decision upholding the RIAA’s challenge to Judge Gertner’s decision to permit webcasting of a motion hearing in the RIAA v. Tenenbaum case was issued on April 16, 2009, very shortly after oral argument.

The First Circuit, interpreting a D. Mass. Local Rule, held that U.S. District Judge Nancy Gertner’s interpretation of the local rule concerning photographing recording and broadcasting of courtroom proceedings was “palpably incorrect”.

This result is quite disappointing for many people who had hoped that the First Circuit would hold that Massachusetts District Court Judges have have the discretion to webcast court proceedings in their courtrooms, and that this would be a first step toward allowing the public to view federal district court civil proceedings. The decision will, many hope, lead to a change in the pre-Internet Age Rule that was found to prohibit the webcast.