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Appeals court upholds copyright infringement ruling against MP3 resale site

By | Published on Thursday 13 December 2018


The unapproved resale of MP3s online constitutes copyright infringement, the Second Circuit appeals court in the US has confirmed. No one is the slightest bit interested in reselling MP3s online any more of course, but they were in 2012 when EMI sued a company called ReDigi, which had set up a second-hand MP3 marketplace.

ReDigi argued that fans selling on their old MP3s was no different than them selling on their old CDs. The latter is allowed because copyright law generally limits a copyright owner’s ‘distribution’ control to the first sale of a physical copy. In the US this is referred to as the ‘first sale doctrine’. The tech start-up also argued that its software could verify that the MP3 being sold was legit and ensure that the file was deleted off the seller’s PC after the sale.

The music industry argued that transferring an MP3 from one PC to another caused a reproduction to occur, whereas when a customer sells on a CD no copying is required. There is no ‘first sale’ limitation on the reproduction element of the copyright, so ReDigi was encouraging and facilitating copyright infringement with its MP3 marketplace.

The courts sided with EMI in its copyright infringement action back in 2013. Though that ruling didn’t deal with what damages the start-up should pay the record company. A few years of back and forth went on in that regard, with an agreement being reached between both parties in 2016. Throughout that process ReDigi also vowed to appeal the 2013 ruling, reckoning its first sale doctrine and other fair use arguments should stand.

However, appeals judges in the Second Circuit weren’t any more impressed with those arguments than the lower court. According to Law360, the appeals court stated this week: “None of [ReDigi’s] arguments negates the crucial fact that each transfer of a digital music file to ReDigi’s server and each new purchaser’s download of a digital music file to his device creates new phonorecords”.

ReDigi suspended its operations in the midst of all these legal wranglings, with the company behind it seeking chapter eleven bankruptcy protection at one point. The firm’s home page has been counting down to the appeals court ruling of late, and continues to do so despite said ruling now having been issued. It’s not clear what steps the company plans to take next.