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EFF and Universal battle over sale of promotional CDs

12 August 2007 9:59 by Rich "vurbal" Fiscus | 10 comments

A legal storm is brewing between the Electronic Frontier Foundation and Universal Music Group over the right to sell CDs distributed for promotional purposes by music labels.

The dispute started when Universal sued Troy Augusto for selling CDs labeled "For Promotional Use Only". Augusto, with the backing of the EFF, filed a counter suit claiming that he has the right to sell them under the First Sale Doctrine.

The First Sale Doctrine is one of the most basic tenets of copyright law. It essentially states that the buyer of copyrighted material has the right to sell it later. The doctrine has been upheld repeatedly by various courts.

Universal's lawyers argue that the principal doesn't apply here because they never offered the CDs for sale. Instead they're given away, primarily to radio stations, in an attempt to get public exposure through third parties.

Their claim is that what they're doing is distributing media, and not a selling a standard license like the one assumed for retail CDs. A statement from UMG indicates that they consider the CDs to be their property.

Their statement goes on to say "this is not the first time that Mr. Augusto has been sued for this type of conduct. He was previously sued by Capitol Records and Virgin Records for the same thing and consented to a permanent injunction."

The EFF disagrees with this assessment, saying that Universal is trying to take away the First Sale Doctrine by simply labeling the product, which isn't a right they have as a copyright holder.

Regardless of which side prevails, the real issue could potentially be the wording of the judge's decision. A decision that doesn't specifically address both First Sale and the right of copyright holders to provide content under different licenses is likely to spark more lawsuits, and it's very likely that whichever side loses will appeal.

Sources:
Information Week
Digital Media Wire

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Unfocused (Member) 12 August 2007 10:49
If he owned the CD's, what is the difference between him and the street vendors of New York? They all claim that they are trying to get their music out there, but they wont let you have the disc for free. [ + quote]
nobrainer (Inactive) 12 August 2007 16:42
*Originally posted by Unfocused:* If he owned the CD's, what is the difference between him and the street vendors of New York? They all claim that they are trying to get their music out there, but they wont let you have the disc for free. but the record companies are losing cash in they need every penny they can rob from artists! [ + quote]
justme81 (Newbie) 12 August 2007 17:08
This guy is selling something that is meet to be given away for free as a promotion. FREE VS Paying. The record companys in this case are trying to keep the promo Cds FREE. Unless I'm missing somthing [ + quote]
gallagher (Member) 12 August 2007 17:13
justme81, that is like saying that if your parents or anyone else gives you something, you are forbidden ever to sell it. Makes no sense, right? Neither does this. [ + quote]
DVDdoug (Junior Member) 13 August 2007 12:02
*Quote:* justme81, that is like saying that if your parents or anyone else gives you something, you are forbidden ever to sell it. Makes no sense, right? Neither does this. Right! Or, it's like someone selling you a classic car and requiring you to sign a contract saying that you will not alter it from its original condition. Once you own it... You OWN it! In this case , if Troy Augusto had a contract with Universal (or Capitol or Virgin) then they may have a case against him if he violated the contract. Simply printing a "license agreement" on the package doesn't generally constitute an enforceable contract. Here's a similar example: I was recently given a pair of free-sample contact lenses by my optometrist. They were labeled "NOT FOR RESALE... You should not have been charged for these.", etc. If the optometrist had sold the lenses, the manufacturer could take action against her. In reality, they would probably just cut-off her future free supply. However, if I sell them, there's nothing they can do about it! [ + quote]
Unfocused (Member) 13 August 2007 21:16
*Quote:* Right! Or, it's like someone selling you a classic car and requiring you to sign a contract saying that you will not alter it from its original condition. Once you own it... You OWN it! If the RIAA and MPAA get their way, you will never ever "own" another piece of music or movie again. [ + quote]
Blackjax (Member) 13 August 2007 21:53
They have essentially done that now with the dmca and drm! Lord help you if big brother catches you copying a dvd or cd you legally purchased!! [ + quote]
cousinkix (Newbie) 13 August 2007 22:34
How ironic. The big bully record company is fighting a stupid battle; with an organization founded by associates of the Grateful Dead. John Perry Barlow (barlow@eff.org) has dozens of his original songs covered under federal copyright laws. This guy is no dummy and he doesn't like a lot of the BS going on in this stupid music war... [ + quote]
borhan9 (AfterDawn Addict) 17 August 2007 18:47
Promotional CD's should be given to shops that they are selling their product too for the consumers to know what is new and then see how much demand for that product is out their. [ + quote]
Steve83 (Member) 17 August 2007 22:10
How is this in ANY WAY different from Sony selling game consoles? Once they're sold, how can they inhibit what the OWNER does with them, including changing parts out (like a chip)? [ + quote]