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.