James Delahunty
14 Apr 2008 18:13
The Electronic Frontier Foundation (EFF) and the Keker & Van Nest law firm based in San Francisco filed briefs in federal court last week defending an eBay seller. Troy Augusto was reselling promotional CDs on eBay that he acquired at secondhand stores in the Los Angeles. His activity got the attention of Universal Music Group (UMG).
Augusto, who traded as "Roast Beast Music" on eBay, was sued back in May 2007 for 26 eBay auction listings involving UMG promo CDs. At issue is whether the "promotional use only, not for resale" labels on these CDs can trump a consumer's right to resell copyrighted materials that they own, guaranteed by copyright law's "first sale" doctrine.
Major record labels distribute promotional CDs to industry insiders to create buzz around recordings. These promo CDs often make their way into secondhand stores, where Augusto purchases them for resale on eBay. UMG stamps its promo CDs with labels declaring that the CDs may not be resold and remain the property of UMG. The "first sale" doctrine in copyright law, however, makes it clear that once the copyright owner sells or gives away a CD, DVD, or book, the recipient is entitled to resell it without needing further permission.
"If UMG is able to stop resale of CDs just by putting 'not for resale' labels on them, then there is nothing to stop other restrictive labels from appearing on CDs, books, and DVDs," said EFF Senior Intellectual Property Attorney Fred von Lohmann. "Record companies are not entitled to strip consumers of their first sale rights simply by putting labels on their products."
The summary judgment brief filed Monday argues that UMG gives up ownership of these promo CDs when it mails them unsolicited to thousands of people without any intention of their return. Accordingly, the first sale doctrine permits purchasers to resell these CDs.