CAnAdA CAught in U.S.-ChinA trAde wAr
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.”
A U.S. appeals court ruling was a victory for Capital Records.