ReDigi, Capitol Clash In Court About 'Used' Tracks

by Wendy Davis, Oct 5, 2012, 6:10 PM

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ReDigi, a start-up that offers people a way to sell "used" iTunes tracks, asked a federal judge in New York to throw out a copyright lawsuit brought against it by Capitol Records.

ReDigi lawyer Gary Adelman told U.S. District Court Judge Richard Sullivan at a Friday morning hearing that the company's technology enables consumers to resell digital tracks, the same way they can resell CDs or vinyl records. Adelman argued that consumers have a "first sale" right to resell products that they legally purchased.

But Capitol countered that consumers aren't selling the same works that they purchased, but copies that they upload to the cloud. "First sale does not apply if there's been a reproduction," Capitol's lawyer, Richard Mandel, told Sullivan.

ReDigi says its platform scans users' hard drives for proof that the music was acquired legally, and then allows users to transfer their tracks. The company says it makes the tracks disappear from users' hard drives by truncating them piece by piece, while simultaneously sending them to ReDigi's server in Arizona.

Capitol characterizes the technology differently.

The record label says that ReDigi is copying the tracks -- which Capitol says violates copyright law -- and then deleting the originals. (Capitol has also argued in its written papers that even if the tracks are removed from users' hard drives, ReDigi has no way of knowing whether users have the tracks on other devices.)

ReDigi has said it's fighting for consumers' rights to dispose of digital media as they see fit. If Capitol prevails, it will be able to effectively prevent a secondary market for music that was originally purchased online.

Sullivan said at the start of the two-houring hearing, he wanted to focus on whether ReDigi's technology infringed copyright as the law is written, and not on the broader questions raised by the case. "There are a lot of people who are interested in what the law should be," he said. But, he added, those policy issues "are not what we're here to decide today."

Much of the hearing focused on the nature of ReDigi's technology, and whether it "copies" tracks -- which would implicate copyright law -- or merely "migrates" them, as ReDigi contends.

Sullivan said early in the hearing that the distinction sounded "like semantics," but he also asked detailed questions aimed at figuring out exactly how the technology worked.

Drawing on pop culture, Sullivan attempted to view ReDigi's "migration" technology through the prism of "Star Trek," posing the rhetorical question of whether the technology could be viewed as a "transporter."

While that question was not answered, Sullivan previously made comments that bode poorly for ReDigi. He said at a hearing in February that he thought Capitol had shown a likelihood that it will eventually prevail.

Sullivan reserved decision at the close of the hearing.

 

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