U.S. District Court for the Southern District of New York holds that the first sale doctrine does not apply to the resale of digital music files

On 30 March 2013, the U.S. Southern District of New York has held that the first sale doctrine was not applicable to the resale of digital music.

In this case, ReDigi offered a service allowing owners of legally acquired digital files to upload and resell them to other users, while deleting the original file from their hard drives. ReDigi argued that since the first copy of the file was legally acquired and deleted once acquired by another user, the first sale doctrine should apply and insulate the original owner of the file – and therefore ReDigi which provided such service – from any liability for copyright infringement.

Capitol Records however sued ReDigi for direct, contributory and vicarious infringement, notably for providing a service whose purpose was to infringe copyright.

The Court held that because transferring these digital files necessarily involved copying them on a new material object (i.e. a new hard disk), without the authorization of the copyright owner, ReDigi was violating the copyright owner’s distribution right.  The Court also rejected ReDigi’s fair use defense, observing that the service was not capable of substantial non-infringing use.

This decision presents an interesting contrast with that issued in UsedSoft v. Oracle (see Newsletter 4-5/2012 p. 7-8) where the CJEU held that the “right of first sale” did in fact apply to a “used” software online marketplace. [Béatrice Martinet Farano]