CAnAdA CAught in U.S.-ChinA trAde wAr

Calgary Herald - - FRONT PAGE -

NEW YORK A vir­tual mar­ket­place de­signed to re­sell dig­i­tal mu­sic files as if they were sec­ond-hand vinyl records runs afoul of copy­right law, a U.S. ap­peals court ruled in a vic­tory for record la­bels.

ReDigi Inc., a closely held com­pany that pro­vides a plat­form for the re­sale of legally pur­chased mu­sic files, had ar­gued that its ser­vice fa­cil­i­tated the trans­fer of mu­sic from one re­cip­i­ent to an­other with­out du­pli­cat­ing the orig­i­nal file.

The ap­peals court said the trans­fers cre­ated du­pli­cate copies of the mu­sic files so were not al­lowed un­der U.S. law. Any change to de­velop rules for sec­ond-hand sales of dig­i­tal files would be up to Con­gress, the U.S. Court of Ap­peals for the Sec­ond Cir­cuit rules in the closely watched case.

“The es­tab­lish­ment of ReDigi’s re­sale mar­ket­place would ben­e­fit some, es­pe­cially pur­chasers of dig­i­tal mu­sic, at the ex­pense of others, es­pe­cially right­sh­old­ers,” wrote Cir­cuit Judge Pierre Le­val for the three-judge panel.

The mu­sic com­pa­nies ef­fec­tively would be in com­pe­ti­tion with sec­ond-hand mer­chan­dise that, “un­like sec­ond hand books and records,” are “as good as new.”

It was a vic­tory for Capi­tol Records, which had won a US$3.5-mil­lion judg­ment in fed­eral court in New York City.

The ex­tent to which the de­ci­sion might af­fect con­sumers who want to re­sell legally pur­chased dig­i­tal mu­sic files is un­clear, ac­cord­ing to Jonathan Band, a lawyer who rep­re­sented the Amer­i­can Li­brary As­so­ci­a­tion in its brief in sup­port of ReDigi.

“On one level, it does seem to pre­clude a pri­vate sale,” said Band. “It could be, on the other level, be­cause they didn’t ad­dress that spe­cific is­sue, maybe it could be raised in the fu­ture.

“The door is not closed on the pos­si­bil­ity of maybe an in­di­vid­ual be­ing able to sell be­ing a fair use. I think there is this one ar­gu­ment out there that was not re­jected.”

TIM RUE/BLOOMBERG FILES

A U.S. ap­peals court rul­ing was a vic­tory for Cap­i­tal Records.

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