Court Rules Reselling Digital Music is Copyright Infringement

By Ben Sisario via The New York Times

“A federal judge in New York has dealt a blow to the nascent business of reselling digital goods like music and e-books, ruling that a small company’s secondary market for digital music infringes on the copyrights controlled by record companies.

The company, ReDigi, opened an online platform in late 2011 that allowed people to upload and resell songs they had bought from online retailers like Apple’s iTunes. ReDigi said its technology deleted the original file once a copy was put up for sale, but the major record labels were skeptical, and Capitol Records sued in early 2012.

The case has been closely watched as a test of whether the first sale doctrine — the legal principle that someone who owns a copy of a copyrighted work, like a book or album, is free to resell it — can be applied to digital goods.

In an order dated Saturday, Judge Richard J. Sullivan of United States District Court in Manhattan ruled that ReDigi was liable for copyright infringement, and seemed entirely unmoved by ReDigi’s arguments.”

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