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EFF backs eBay user in Universal promo CD case

Written by James Delahunty (Google+) @ 14 Apr 2008 18:13 User comments (8)

EFF backs eBay user in Universal promo CD case 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.

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8 user comments

114.4.2008 19:11

I am happy for that verdict. If the other way all the 2nd hand resell cd/dvd stores would have to shut down because the labels would look and find them there.

214.4.2008 19:32

Originally posted by sssharp:
I am happy for that verdict.
The case hasn't gone to court yet so what verdict are you talking about? :P

314.4.2008 20:01

curious to see how this turns out...

414.4.2008 20:15

I'm surprised this case hasn't been thrown-out already... A Not For Resale does NOT constitute a legally binding contract. It's very silly to give-away (or sell) something, and try to restrict what the new owner does with it. Let's say I sell my car and I make the new owner sign an agreement promising never to sell it, and promising never to paint it a different color. That contract isn't worth the paper it's printed on. He's the new owner and he can do whatever he wants with it.

Mr. Augusto bought the CDs, he owns them, and he can do whatever he wants with them (except make illegal copies).

The only way UMG could have a case is if the CDs were stolen. In that case, UMG would retain legal ownership even if they don't retain possession. But as far as I can tell, they never expected to get the CDs back. That means ownership was transferred when they gave then away in the first place, and they have no say in what happens to them after that.

514.4.2008 21:00

He bought them in a second hand store.. which implies that the store bought them from somebody else... and so on and so on.

It's been common business for people to trade promo copies (demos) for years and years.. This is the first time I have ever heard of such a stupid greedy idea. UMG like the rest of the music business need to get their heads out of their collective a$$es pretty quick.. This is stupid and pointless litigation.. I hope the judge finds against them.. and forces the court to bring a pointless and punitive action against them for wasting everybodies time.. A fine of 200 million dollars sound about right for infringing this persons right to sell his legally bought and owned property? And a list of other things I can think of...

I'm waiting for UMG to start whining "but the artists haven't received any royalties for these disks" just to add insult to injury.. Ever heard of an artist ever getting any royalties from a second hand cd before? Nope.. didn't think so...

If they insist that they can't be sold then what are people supposed to do with them?.. Rip them and upload them springs to mind.. That way they are passed on to another without being "sold"

Download everything.. f--- the RIAA!!

614.4.2008 22:01

Originally posted by varnull:
f--- the RIAA!!
Yep, that sums it up pretty well. Another version of the RIAA suing for something when they should keep there mouths shut. If a business sues 50% of their customers, they won't be in business long. Keep it up RIAA, you're only hurting yourself.

714.4.2008 23:37

Originally posted by varnull:
Download everything.. f--- the RIAA!!
i don't quite dowload everything;
often i try and seek out independently produced music.

thing is the riaa have made it so hard to do that.
the environment they've created means exposure>talent,
and therefore even the 10 artist that get airplay suck.

815.4.2008 14:40

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.
this only applies to physical sales, if you download music you only purchase the right to use it, you are not allowed to: resell, lend or give them away, now IFPI lets here more rhetoric of dwindling CD sales and a move to full on-line distribution. If you purchase media make sure you actually own it, dont purchase an empty bag ppl demand your rights don't allow Big Media to destroy them.

This message has been edited since its posting. Latest edit was made on 15 Apr 2008 @ 14:46

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