1. Shoot that Poison Aereo to My Heart! How a Copyright Decision Can Be So Wrong (Yet So Right)

    Free-Riding on a Dream

    By coincidence, the SDNY’s rejection of ReDigi’s business model happened at almost the same time as the Second Circuit’s seeming affirmation of Aereo’s business model. This coincidence led to a certain amount of bewilderment. How could one court rule to strengthen copyright at the same time another court ruled to weaken copyright? The answer, of course, is that courts don’t—or shouldn’t—worry about the relatively weakness or strength of copyrights. They’re in the business of implementing the Copyright Act—a task that just gets harder and harder. The main lesson here is that, regardless of the copyright law’s purpose and policies, it is (outside of fair use and a couple of other things) often a highly technical law that can have counterintuitive results.

    Aereo-logo-and-antenna-array-420x280

    I believe this images shows part of Aereo’s array of TV antennae, each the size of a dime.

    Copyright as Economic Policy

    The bewilderment had two sources. First, there are those with an extra-legal interest in the strength or weakness of copyrights. For both content providers, who prefer stronger copyright (but have mixed feelings about fair use), and information providers, who see strong copyright as a nuisance, the courts went 1-for-2. Either ReDigi … Read More»

  2. Copyright Holders Eat ReDigi’s Cake and Have it, Too

    But is the Cake a Lie?

    As many of you know, the trial court in Capitol Records v. ReDigi ruled over the weekend that ReDigi’s business model of re-selling digital music files infringed the copyright. Here’s the opinion. I’ve written about ReDigi quite a lot because (1) ReDigi’s business model poses lots of unresolved legal problems and (2) I had to create a new set of posts once I (along with the rights holders) learned how ReDigi really worked. My previous ReDigi posts are collected here. I only have time for a quick post before I have to go somewhere*, so here’s my quick analysis.

    * I’ll be moderating a panel on gTLDs at the ABA Intellectual Property Meeting in Crystal City. You should totally come, if you can, because my panelists are awesome and the topic is timely, important and fascinating, which will more than make up for my bumbling attempts to ask incisive questions.

    4586899100_55b0451468_z

    I couldn’t find a free image of a Portal Cake, but this cake looks pretty good.

    Background: Is ReDigi’s Cake Just Mostly Frosting?

    Here’s how ReDigi works, in a very tiny nutshell. You sign up. You upload songs you want … Read More»

  3. Music Industry v. ReDigi: The Problem with Phonorecords: Copyright

    When Is a Phonorecord Not a Phonorecord?

    Last time, we finally figured out how ReDigi operates and how it plans to get around the fact that it must make at least one (and often two) intermediate copies of a song file in order to complete the sale of the song file. ReDigi’s solution is to structure itself as an Amazon-style music locker and rely on space/format shifting for those intermediate copies.

    But this doesn’t get around the other concern I raised (way back here), which we might call the “phonorecord problem.” Recall that the nub of the RIAA’s argument is that the First-Sale Doctrine is limited the distribution right. The RIAA’s point was that the intermediate copies exercised the reproduction right and, therefore, fell outside the scope of the First-Sale Doctrine. While I thought there might be a different way of looking at that issue, it turns out ReDigi is fine with the RIAA’s argument, since it thinks it has an alternate (and better) legal theory regarding those intermediate copies.

    The “phonorecord problem” is more fundamental. Under a strict and plain reading of the Copyright Act, the distribution right is limited to the distribution of physical embodiments … Read More»

  4. Music Industry v. ReDigi: Cute or Clever?

    Is ReDigi a Marketplace or a Music Locker?

    I am compelled to blog about ReDigi one more time because, at long last, we actually know how ReDigi operates. And it’s not *quite* how ReDigi says it works on its FAQ. It’s actually far more clever and elegant–at least, legally speaking. This means, among other things, that parts of my previous posts about ReDigi are no longer completely accurate* (because they were based on the ReDigi FAQ and some other public statements by ReDigi). At a minimum, I need to clear that up. But also, ReDigi’s legal theory is worth an additional blog post.

    *Among other things, the whole “Do Star Trek replicators infringe copyright” thing was unnecessary, as it turns out. As you’ll see, ReDigi does not destroy the original at the same time it creates the copy–a technological feat that would be remarkable but not impossible. Still, it’s an interesting thought experiment into the nature of the reproduction right, no?

    ReDigi ReCap

    To recap a bit about ReDigi: it provides an online marketplace for the re-sale of used audio files. It has one very important limitation: only songs you purchased online were eligible–thus, you can’t sell songs … Read More»

  5. ReDigi Finale: Comparing Apples to Amazons (Part 20 in Our Online Music Services Series)

    And Other Loose Ends.

    This is going to be (I hope) the last post about the ReDigi situation, at least for a while. I’ll admit I got distracted by the RIAA’s little missive to ReDigi. I want to sum up and wrap up. First, the summing:

    The Three Legal Obstacles to a Digital First-Sale Right

    Looking over the five (!) previous posts about ReDigi, we see three obstacles to its legality:

    1. Do the consumers who wish to sell their digital singles actually own, or merely license, the music files? That’s what Vernor helps us answer, as discussed here.
    2. Is the First-Sale Doctrine limited to the same physical item that was the subject of the “first sale”? I discuss this question here and here.
    3. By what right can ReDigi make the temporary, intermediate copies necessary to transfer the song file? I discuss this issue here and here.

    So. There. Now, let’s tie up a few loose ends.

    What About Amazon?

    When I first discussed whether ReDigi’s system could comply with Vernor (to answer the question of whether the potential sellers “own” the digital downloads), I focused exclusively on the iTunes Store license agreement. I did so … Read More»

  6. ReDigi Redux: Essentials of the Essential Step Defense (Part 16 of our Online Music Services Series)

    Digital Content: Dumb Data or Clever Instructor?

    I received so many comments on my ReDigi post that I need to write a couple of follow-up posts to address the good questions. This post and the next will focus on questions raised about the fact that ReDigi needs to make an intermediate copy of the song files, and the one after that will clean up some lingering issues about the first sale doctrine itself.

    The Intermediate Copy

    My last post was focused on the first-sale doctrine and the Vernor decision, but several people pointed out that, in order to transfer a music file from the seller to the buyer, ReDigi has to make at least one intermediate copy. It doesn’t matter ReDigi erases the seller’s copy of the file at the same time it makes a copy of the file on its own server–it’s still making a copy, and making a copy requires exercise of the reproduction right. See Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992). So, assuming ReDigi isn’t licensed* and assuming ReDigi may avail itself of the first-sale doctrine**, what defense might it have against a claim that this intermediate copy is … Read More»

  7. ReDigi RIAA ReDux: New Wine, Old Skins (Part 19 of Our Online Music Services Series)

    What Old Cases Don’t Teach us About New Tricks

    In my last post, we started to look at the legal claims made by the RIAA in the demand letter it sent to ReDigi. We focused on the plain language and legislative history of the first-sale statute–banged our heads against it, really. I concluded that the statute is simply not equipped to resolve a situation in which a digital download is sold by its owner (under Vernor) by sending it to the buyer over the internet while simultaneously removing the song file from the seller’s storage.

    The RIAA will argue that the statute’s failure means victory for it: if the first-sale statute does not specifically provide for digital transfers, then they must fall outside the statute’s scope. ReDigi will argue that the statute shouldn’t be so rigidly and technically applied. Its purpose is to facilitate re-sale (and re-transfer) of copies that had previously been sold. The only reason the statute seems so limited is that it was only codifying old case law, and the case law, by its very nature, couldn’t predict how the technology for re-transferring digital content would evolve.

    In its demand letter, the RIAA … Read More»

  8. ReDigi: Can the First-Sale Doctrine Ever Apply to Digital Downloads? (Part 18 of our Online Music Series)

    The RIAA Strikes Back

    So it turns out that the RIAA isn’t cool with ReDigi. So much for the maybe-they’re-secretly-licensed theory. You can read the RIAA’s demand letter to ReDigi here. It raises an issue I hadn’t considered before, so wrapped up was I in applying Vernor and the first-sale doctrine. RIAA questions whether the first-sale doctrine even applies in the first instance. If the RIAA is right, then my previous analyses about ReDigi’s right to the first-sale doctrine are cut off at the knees.

    Warning: this is an unusually long post (even for me), but there was no way to split it up without ending with a misleading conclusion. In light of the controversy that ReDigi (and by extension your blogger) has gotten into, I thought it best to keep this as one long post rather than split it up.

    The RIAA’s Legal Position

    The RIAA’s logic goes like this. When you sell a music file over the internet, you aren’t selling the copy that’s actually resident on your computer (or wherever). You’re selling a copy that ReDigi made of your song. According to the RIAA, the first-sale doctrine applies only to the exact copy of a … Read More»

  9. ReDigi: Is the Necessary Step a Fair Use? (Part 17 of our Online Music Services Series)

    When is Making Temporary, Intermediate Copies a Fair Use?

    Last time, we discussed whether ReDigi could avail itself of the “essential step defense,” on the theory that making intermediate copies of the music files was necessary for ReDigi to carry out its (assumed*) right to re-sell the files under the first-sale doctrine. I concluded that the essential step defense probably doesn’t apply because, even if digital content qualified as a “computer program,” the defense is limited to “utilization” of computer programs “in conjunction with a machine,” and I thought utilization was probably limited to executing a program and couldn’t be stretched to cover re-selling the “program.”

    * As we discussed here, this is by no means conclusive. We’re assuming the first-sale doctrine applies for purposes of this discussion.

    So, there’s no specific right under the Copyright Act to make temporary, intermediate copies of a work as necessary to exercise some other right in connection with that work. But the idea is appealing. If you have the right to do X, a technicality of copyright law shouldn’t prevent you from doing so, right?

    Copyright Legal Technicalities and Fair Use Revisited

    This causes us to revisit two of the basic … Read More»

  10. ReDigi: A Digital Secondary Market (Part 15 of Our Online Music Services Series)

    Can ReDigi Take Advantage of the First Sale Doctrine?

    When I first contemplated this Online Music Services Series, I decided not to discuss Apple’s iTunes Store service or similar services because (1) they weren’t new, and (2) the relevant law was pretty boring. While it’s true that the U.S. Supreme Court recently let stand a lower-court ruling that downloading songs from iTunes-like services does not constitute a “public performance,” hardly anyone was surprised by the result.* When you download a song from iTunes, Apple is making a copy of the song file and sending it to you–it’s your own copy, which you can play whenever you want. This is different from streaming services in which multiple users receive the streams of music derived from the same “single master” but which they don’t get to keep.

    * ASCAP sued because, although its case was a long-shot, the amount of money at stake made it worth the effort. ASCAP is charged with collecting royalties for public performances on behalf of songwriters, so if downloads were public performances… 

    ReDigi and the Creation of a Digital Secondary Market

    But, then along comes ReDigi, a twist on the iTunes Store model that … Read More»

Rick and Tara are experienced lawyers who have set out to serve clients in a new way. Rick's roots reach back to his Silicon Valley home, where he first developed his litigation-oriented practice before moving to Nashville in 2004. Tara got her start in the music publishing business in Nashville in 1998 and has used that experience to form the basis of her transactional law practice since graduating from law school in 2004.
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