Why The Judge Who Struck Down Digital First Sale In New York Isn’t Helping The Copyright Debate

For those of you who were hoping that we might figure out a sane way to resell digital content in the same way there’s a thriving secondary market for used books, CDs, and movies, seem about to be disappointed after a New York judge, in a sweeping decision, rejected the idea that files are objects in the same way that other means of delivering content are:

The company believed that the lawsuit that followed was one of “first impression” insofar as the plaintiff — Capitol Records — might wish to have it declared that the first-sale doctrine didn’t apply to digital goods. Supporting ReDigi’s side was Google, which unsuccessfully attempted to file an amicus brief. Other tech companies also had a stake; Amazon, for instance, has gained a patent on a market for “used” digital music and movie files.

The record industry wasn’t seeking a big declaration. In its own papers, the plaintiff only said that letting users buy and sell previously purchased tracks on iTunes amounted to a “clearinghouse for copyright infringement.”Nevertheless, on Monday, U.S. District Judge Richard Sullivan went swinging for the fences; unfortunately for ReDigi and those hoping for a vibrant e-market of used song files, the judge wound up completely rejecting the company’s position. He did so not only by turning to the law of copyright but also the law of physics, declaring the “impossibility” of what ReDigi was touting. “The first-sale defense,” he wrote, “does not cover this any more than it covered the sale of cassette recordings of vinyl records in a bygone era.”

This strikes me as a decision that goes against the interest of both consumers and content providers. If content providers want individuals to get on board with the idea that files are property, and that the transfer of them without compensation causes damage to creators, an important part of that idea is that files are distinct objects, rather than ephemera that can be copied at no loss to them from a production standpoint, or loss of their ability to sell other downloads. I also am not sure how Judge Sullivan’s understanding of physics transfer to cyberspace, but perhaps he’s never bumped up against the memory limits of an iPhone before. From a business standpoint, it would obviously be preferable to content companies if they were the only people who retained the right to sell those objects. But that’s an idea they had to surrender on with physical objects a long time ago, learning that it creates a more stable market and preserves product standards to let people resell objects they’ve purchased than to block the first sale doctrine and see illicit copies of textbooks, burned CDs, or bootlegged VHS and DVD copies of movies begin circulating among people who aren’t actually a market for those products in their new, unused form.


Digital resale, I’d think, actually represents an opportunity for content companies to get more of their money back from resale than the resale of physical objects. If resale can be brokered through the original venues that sold the tracks, movies, or books, those venues could write contracts with publishers, studios, and record labels that let artists and content companies get some money back from those resales, along with both the sellers and the venues. A stable and brokered secondary market is probably the only way to guarantee that people who sell files will really get them off their computers — I imagine iTunes could write its code such that if you resell a track through the service, then try to upload it to iTunes without paying for it again, the file would be disabled and you’d get a warning, in the same way Amazon could probably scrub all versions of a track you’ve resold from its cloud storage. Having both sides in the digital content debate acknowledge that files are objects could produce a kind of detente, in which content companies grant consumers some more rights to do what they want with the objects they’ve purchased in exchange for consumers’ acknowledging that if they’re getting money off resale, there is in fact value in individual copies of files.