The Digital Used Record Store: Capitol Records v. Redigi

When I was a teenager I had a great collection of vinyl albums, including classics by bands such as The Beatles, Led Zeppelin, Creedence Clearwater and Yes. One of my distinct pleasures was to peruse the album collections in used record stores in the hopes of finding a catch in good condition and at a good price.

The used record store could lawfully purchase and resell copies of albums originally bought as new under the “first sale” doctrine, whereby the owner of a “particular copy” of a copyrighted work that was lawfully purchased could “sell or otherwise dispose of the possession of that copy” without violating the copyright owner’s exclusive right to reproduce or distribute that work.

The proprietors of have a great idea – hosting the online version of the used record store. According to their website they host “The World’s First Pre-Owned Digital Marketplace.” ReDigi offers “pre-owned” copies of digital music files lawfully purchased by a user from sources such as iTunes. ReDigi thought it was complying with the copyright law by, first, assuring that the digital music file being transferred to ReDigi for resale was lawfully purchased and not stolen, and, second, assuring that when the file being offered for resale was migrated from the user’s computer to the ReDigi server, no copy was left on the user’s computer.

Capitol Records sued ReDigi for copyright infringement, claiming that ReDigi was engaged in unlawful reproduction and distribution of its copyrighted musical works. In a recent decision, the trial judge concluded that the movement of the digital file from the user’s server to the ReDigi server constituted the unlawful “reproduction” of the copyrighted work.  The judge reasoned that Capitol Records had the exclusive right to “reproduce [its songs] in copies or phonorecords,” 11 U.S.C. § 106(1), that a “phonorecord” is a “material object,” 11 U.S.C. § 101, and that since migration of a music file from a user’s computer to the ReDigi servers involved fixation of the file in a new “material object,” the ReDigi drive, the process involved unlawful “reproduction.”

The trial judge opened his decision by defensively reciting that he was presiding over a “court of law and not a congressional subcommittee or technology blog.” In other words, he felt that he need to apply the copyright law as written rather than reinterpret the law to support a policy of permitting resale of digital music files.

I, however, feel that the court engaged in a strained reading of the copyright law, and that it could have ruled in favor of ReDigi based upon the law as it presently reads. To “reproduce” commonly means to “duplicate,” to create two where before there was one. Migration of digital data from one drive to another, in a fashion that does not leave a copy of the data on the originating drive, is the modern equivalent of physically carrying a vinyl album to a brick and mortar store. No second file was created where before only one existed.

ReDigi’s business model should, in my opinion, be protected by the “first sale” doctrine. The case is going to the court of appeal, where I predict the trial judge’s ruling will be reversed.