Can You Legally Re-Sell Your Digital Music Files?

Can you legally resell your second-hand digital files? That’s an unusual question not yet directly answered by the courts.

U.S. copyright law’s first sale doctrine says that a purchaser of a legally made book, a DVD, or other physical object embodying a copyrighted work may legally resell that copy. (You can’t make copies of the work or make a movie of the book you bought, though.)

You wouldn’t necessarily think of a digital file as being that kind of object. But a Cambridge, Massachusetts company called ReDigi thinks a digital file is legally like a CD. The technology is a little complicated, but a simple explanation is that ReDigi provides software that attempts to eliminate copies of a digital music file you have on your computer. You can then use ReDigi’s service to resell the music file to someone else through ReDigi’s online marketplace. ReDigi offers artists whose songs are sold a portion of the income (apparently songwriters, record companies, and music publishers are not paid a share).

ReDigi was sued by Capitol Records in federal court in New York City for copyright infringement in January 2012. This case is still pending. ReDigi’s legal position is more fully explained here:

The company just announced it is planning an expansion into Europe. According to the Financial Times, eBooks and videogames, as well as music, would be resold in the EU.

The legal issues are complex. They involve several factual and legal questions. How thoroughly does the software delete digital copies from the seller’s device? Do end-user agreements from your on-line retailers apply to resale? Does the first sale doctrine, which dates from the Copyright Act of 1909, apply to such an innovative concept involving new technology? Further, on a business level, it’s fair to ask how many people would go to the trouble of using the software to sell a song at a reduced rate of, say, 69 cents when many buyers might prefer to buy the song conveniently at 99 cents on Amazon or iTunes or – unfortunately — use illegal file sharing services which offer songs for free.

I teach Copyright Law part time at Suffolk University Law School and the facts and laws in this situation seem like a law exam question, particularly because the laws of both the US and the EU law may be tested. Conceivably the resale of software could be more favorable to resellers in the EU than under comparable US law. Overall, though, the distinctive facts of this situation make the case worth watching.Other aspects of the first sale doctrine are evolving, too. The Supreme Court is expected to rule soon on first sale issues relating to importation of books from overseas. Physical media, in various forms, are still a source of controversy in the digital age.

In February 2015, our colleague and friend, partner Mark Fischer, passed away. We have made his blog posts available in honor of both his nuanced and wide-ranging knowledge of intellectual property, new media and entertainment law and of his entertaining style. Please read our tribute to Mark in the firm’s Alumni Spotlight publication and his obituary in the Boston Globe.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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