US first sale doctrine does apply to promo copies

July 2008

Record labels

Music giant Universal Music Group has lost its court battle to stop an eBay trader from reselling promotional CDs he had bought from second hand stores after a US court found in favour of Troy Augusto who makes money by snapping up rare albums circulated as promotional copied by Universal and selling them on the online auction site. Universal accused Augusto of copyright infringement, saying that promotional copies were not authorised for sale to the public. Specialist music shops often sell promo albums or review copies that record labels send out to journalists and radio stations before the regular editions go on sale. Record companies have long maintained that they continue to own these items and can ask for them back at any time. They can be recognised by markings such as “For promotional use only” or “Not for resale”, visible on the record or CD artwork and sometimes on the disc label itself. US District Court Judge S James Otero dismissed the case and said that Mr Augusto was protected by the “first sale” doctrine in copyright law. This says that once a copyright owner gives away a copy of a CD, DVD or book, the recipient is entitled to sell it on. The judge said that the labeling did not alter the legal position.

Music Law Updates Archive May 2008

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