In the olden days, you’d buy an album and when you grew tired of it you’d sell the album to a used record store. That’s because you owned the physical record and once you bought it, that record was yours to do with as you please. This is called the “First Sale Doctrine”. Nowadays most people download their tunes. They still buy or rent it but now they don’t have a physical embodiment of the music. Relying on the First Sale Doctrine, ReDigi Inc. had offered a service whereby you could upload your digital music that you legally purchased from iTunes and resell it. Capitol Records LLC had a problem with that. Capitol Records sued ReDigi for copyright infringement arguing that the First Sale Doctrine doesn’t apply to digital files. The act of uploading the files to ReDigi’s server was creating a copy without permission. The Second Circuit Court of Appeals affirmed a judgment in Capitol Records’ favor. ReDigi also argued that its use was Fair Use. The court held against ReDigi on that as well because ReDigi was commercially motivated, made no changes to the copyrighted works, used the entire works, and resold the digital music files in the same market as the copyright owners.

WHY YOU SHOULD KNOW THIS. This is a good example of ownership in the copyright world. You can own the physical embodiment of a copyrighted work but you don’t own the copyright. You can do what you want with the album, the book or the painting, etc. The problem for ReDigi was that there was no physical embodiment of the music. It was all digital. And the only way to resell the digital file was to copy it and distribute it. Both of those rights belong exclusively to the owner of the copyright.