Capitol Sues Music Service Offering "Used" Digital Music
Capitol Records has sued the owner of the "ReDigi" music service, which, according to Capitol, offers an online marketplace for "used" digital music files. Although, according to Capitol, ReDigi "touts its service as the equivalent of a used record store," only for digital music, Capitol claims that it is in fact "a clearinghouse for copyright infringement."
In its complaint, Capitol alleges that ReDigi's service involves making multiple, unauthorized copies of digital music files. Capitol quotes from ReDigi's pre-launch press release to illustrate the alleged copying: "[A]fter downloading ReDigi's proprietary 'Music Manager' software, users designate the songs they wish to sell from their desktop computers. 'Eligible' tracks are then allegedly removed from the user's computer and 'synced' devices, 'stored in the ReDigi cloud and offered for sale on ReDigi's website.'" Additional copies are made, Capitol alleges, when ReDigi stores the files in its "cloud" and when the files are downloaded to the purchaser's computer.
Capitol's complaint rejects several "excuses" ReDigi allegedly makes for its activities. First, Capitol questions the efficacy of ReDigi's "Verification Engine," which Capitol alleges "analyzes each file uploaded for sale to ensure that the track was 'legally downloaded' by the user in the first instance and thus 'eligible for sale.'" Second, Capitol likewise questions the claim that ReDigi makes sure "the original user will not 'willfully use/possess any copies of the sold item.'"
Finally, and perhaps most interestingly, Capitol rejects ReDigi's assertion that its service is protected by the first sale doctrine of the Copyright Act, 17 U.S.C. 109. That doctrine provides that the "owner of a particular copy or phonorecord lawfully made under [the Copyright Act] is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord."
Capitol alleges that ReDigi is not the "owner" of any particular copy of a copyrighted work as required by the doctrine, nor is it selling the actual "particular copy." As to the latter point, Capitol argues that "[n]either ReDigi nor its users resell the original material object that resided on the original user's computer," rather, "ReDigi and its users duplicate digital files both in uploading and downloading discrete copies distinct from the original file that originally resided on a user's computer."
Capitol alleges claims for direct copyright infringement, as well as inducement of copyright infringement, contributory and vicarious copyright infringement, and common law copyright infringement for pre-1972 recordings.
The case cite is Capitol Records, LLC v. ReDigi Inc., Case No. 1:12-cv-00095-RJS (S.D.N.Y.), filed January 6, 2012. A copy of Capitol's complaint can be found here.
