ReDigi chief speaks to Congress

July 2014

Internet, record labels


The founder of the sometimes controversial MP3 resale platform ReDigi has given evidence to a congressional committee on intellectual property and the internet: the House of Representatives’ sub-committee on Courts, Intellectual Property And The Internet has been examining the USA’s ‘First Sale Doctrine’ and  ReDigi’s John Ossenmacher argued that the right t re-sell a legally purchased MP3 is just as valid as re-selling a CD – But that the content industries have been doing their best to water down the First Sale Doctrine for some time, most recently by exploiting terms and conditions nobody reads to claim that when a customer clicks a ‘buy’ button on a digital content platform, they aren’t actually ‘buying’ anything. Says Ossenmacher: “Consumers are given the option to ‘buy’ music, movies, and books on their screen and the ‘buy’ button looks identical for digital and physical items alike, but in the largely unintelligible legalese (that no one reads) the rights of ownership are watered down or worse, dissolved all-together for these digital purchases. Content holders are attempting to take away a fundamental consumer choice by styling what they call a long-term lease/license into their less-than forthright marketing strategies”. The content industries argue that the First Sale Doctrine can’t apply in the digital domain, certainly where resale occurs over the net, because the transfer of a digital file requires a new copy to be made, something the first sale doctrine was not designed to permit – although Ossenmacher counters this saying his technology allows file transfer without copying. Regular readers will remember there is some confusing case law of the first sale doctrine in the USA: The ReDigi case itself (Capitol Records v ReDigi) has (so far) concluded that consumers cannot re-sell ‘used’ MP3s and that online sales of iTunes files were found not to trigger the first sale doctrine and Judge Richard Sullivan held that that subsequent re-sales were infringements of record label Capitol’s copyright.  But in Kirtsaeng v John Wiley & Sons the Supreme Court held the first sale doctrine did apply to copies of textbooks (paper) even when they had been made (lawfully) abroad and suggest this is evidence of copyright law not keeping up with technology. And in Europe we have the decision of the CJEU in UsedSoft v Oracle which held that multi-seat enterprise software acquired under licence and delivered by download constituted a sale and fell within the scope of the provision for exhaustion of the distribution right in the EU Software Directive 2009.


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