A Legal Blog by Aaron | Sanders, PLLC


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.

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…

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DMCA Circuit Split Averted: New Rule but the Holding Remains the Same

Also, UMG’s Home-Run Stroke Still Need Work

 

Last year* there were two much-anticipated, important decisions about the scope of the major DMCA safe-harbor defenses: the Ninth Circuit in UMG Recordings v. Shelter Capital (better known as the “Veoh case”), which was issued first, and then the Second Circuit in Viacom v. YouTube. They mostly agreed with each other, but diverged on a major point and on a minor point.** I blogged at length about both of them: Veoh here, here and here; and YouTube here and here.

* If by “last year” you mean “2012 plus the tail end of 2011.”

** A quick recap of the the basic mechanics of the two major DMCA safe-harbors are set out here. Remember: there are four requirements that you have to meet in order to take advantage of the safe harbors, simplified somewhat: (1) you implement a reasonable repeat-infringer policy; (2) you are genuinely unaware that content in question is infringing, whether through actual knowledge or indirect “red flag” knowledge”; (3) you don’t both benefit financially and directly from the infringement and have the right and ability to control the infringing activity; and (4) you expeditiously remove content when you receive…

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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 of the copyrighted works, e.g.,…

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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 you ripped off…

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Burning Down the Dance-Hall: UMG v. Veoh Clarifies the DMCA

One of the Great Unanswered Questions Is Answered!

This is the third post on the recent and important Ninth Circuit opinion in the “Veoh case” (actually styled, UMG Recordings v. Shelter Capital, but we’ll call it “Veoh”). In the first post, we marveled at Universal’s surprising leading argument and worried about the fate of user-created videos of cute kittens. In the last post, we analyzed Universal’s surprisingly weak argument that Veoh had “red flag” knowledge of infringing activity and wondered if Universal hadn’t made things worse for rights holders on that issue.

Universal’s third and final argument fares rather better*, although it, too, ultimately fails. It targeted the financial benefit requirement (which, remember, is really a “no financial benefit” requirement). Recall that there are two prongs to this requirement: (1) the provider not receive a “financial benefit directly attributable to the infringing activity”; and (2) the provider have “the right and ability to control” the infringing activity.

* I still think that Universal would have been better off targeting Veoh’s repeat infringer policy. There’s so much we just don’t know about this requirement. Universal would have had a much better shot at reshaping the law in rights-holders’ favor, and at…

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