Judge Rules Against Pre-Owned Digital Sales

Andy Chalk

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Nov 12, 2002
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Judge Rules Against Pre-Owned Digital Sales


A U.S. federal judge has added a new layer of complication to the business of pre-owned digital content sales by declaring that it infringes on copyright.

I still have a problem getting my head around the idea of "used" digital content, although I recognize that for most practical purposes it's no different than the pre-owned games on sale at your local GameStop. You're taking home a disc and a box, but what you're really paying for is the content encoded therein; everything else is just packaging and, therefore, more or less irrelevant.

Regardless of what you think of it, reselling pre-owned digital material (and "pre-owned" sounds so much better than "used" in this context, so I think we'll try to stick with it) is quickly becoming a thing, which inevitably leads to all sorts of questions and concerns about copyright: who owns it, what can be done with it and of course how to reconcile the inherently-tangible concept of used crap to the ethereal digital world.

U.S. District Judge Richard Sullivan is not doing much to help smooth out the situation. Ruling on a lawsuit brought by Capitol Records against ReDigi [https://www.redigi.com/], a site that bills itself as "the world's first pre-owned digital marketplace," Sullivan agreed with Capitol and parent company Vivendi that the "first-sale doctrine" does not apply to digital products.

"The novel question presented in this action is whether a digital music file, lawfully made and purchased, may be resold by its owner through ReDigi under the first sale doctrine. The court determines that it cannot," Sullivan ruled.

The stumbling block is that a reproduction of the original digital file is made during the transfer of ownership, which is illegal. "Because the reproduction right is necessarily implicated when a copyrighted work is embodied in a new material object, and because digital music files must be embodied in a new material object following their transfer over the internet, the court determines that the embodiment of a digital music file on a new hard disk is a reproduction within the meaning of the Copyright Act," Sullivan declared.

The ruling leaves the future of ReDigi in question and has wide-ranging implications for the future of digital content resales as a whole. An appeal will almost certainly be made but if the ruling holds up, it means that any site offering pre-owned digital content for sale will require the permission of the original copyright holder - which, in today's climate, isn't likely to be given cheaply, if at all.

Source: Wired [http://www.wired.com/threatlevel/2013/04/reselling-digital-goods/]



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Upbeat Zombie

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Jun 29, 2010
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I would have to imagine further down the line the "first sale doctrine" should be updated, when it comes to the reproduction of digital content. Since it doesn't really seem like it was created with digital content in mind. And thus doesn't really work well as a law set for them.
 
Nov 28, 2007
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[insert comment about how Europe is far superior to the US, in legal terms]


OK, seriously, I have to side with the judge on this one. Used physical games are one thing. But when you can copy a game onto a blank CD-ROM, then sell the game to the used game retailer without actually losing your access to the game, it gets a bit trickier. Then again, I'm assuming this is done over the PC. It's even easier on a console. You just have to transfer the game over to a flash drive in that case, then voila, you now have a copy to keep, and another one to "trade in".
 

FoolKiller

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I just love how the content in question is either licensed material or a product, but always favouring the company even if it contradicts itself.

The ruling as it stands doesn't make logical sense (not that anything to do with copyright law ever has).

The part that has me scratching my head is this:

...because digital music files must be embodied in a new material object following their transfer over the internet, the court determines that the embodiment of a digital music file on a new hard disk is a reproduction within the meaning of the Copyright Act.

By that reasoning, wouldn't you be guilty of violating copyright by moving songs from iTunes to your iPod or something similar with the non-Apple equivalents?
 

Raesvelg

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Oct 22, 2008
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I can't imagine this surprises anyone. Even in instances where the physical media is easily converted into digital form (meaning that the original media can then be sold at arguably no loss to the original owner) the legal system can at least operate under the pretense that that copying never took place, or that if it did at least the copying is distinctly limited in scale.

Unless you can come up with a foolproof way of binding each individual bit of data to a particular user until such time as they wish to transfer that ownership to someone else, there's really no way to handle digital resale that doesn't pretty much exist to deprive the copyright holder of incomes derived.
 

FEichinger

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Aug 7, 2011
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See, this is where I agree with the ruling: It is completely reasonable. The file does exist twice, the moment it is given to the "new owner" and there is nothing stopping you from keeping a copy yourself either. Both technically and morally, the idea of reselling a file is wrong.

This, however, has nothing to do with resale of used games (which is probably gonna be the most prevalent of reactions in this thread) that were acquired digitally. Games aren't sold as products anymore, but as binding licenses. For better or worse. This also means, however, that resale of a license can be doable. Technically, as well as morally as well as legally.

FoolKiller said:
By that reasoning, wouldn't you be guilty of violating copyright by moving songs from iTunes to your iPod or something similar with the non-Apple equivalents?
Reproduction for your own use is legal. As in: Both copies remain in your hands.
 

Genocidicles

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thebobmaster said:
[insert comment about how Europe is far superior to the US, in legal terms]


OK, seriously, I have to side with the judge on this one. Used physical games are one thing. But when you can copy a game onto a blank CD-ROM, then sell the game to the used game retailer without actually losing your access to the game, it gets a bit trickier. Then again, I'm assuming this is done over the PC. It's even easier on a console. You just have to transfer the game over to a flash drive in that case, then voila, you now have a copy to keep, and another one to "trade in".
It's selling the license, meaning the original user cannot use the music/game/movie anymore.

Think of it as selling the serial number that comes with the game. You could probably copy the game, but without that number then the copy is useless unless you go around the law.
 

Baresark

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I'm American, I really like America for the good things, but this where I start getting fed up (GET IT!). All of these judges are constantly siding against consumers and for big business. You can own and sell a CD, which is just a medium that holds the music, but when the music held on some other medium (ie. HDD or server somewhere) it's all of the suddenly different. The legal system in the US has severely declined over the years, even the Supreme Court seems to routinely delegitimize itself by ignoring the foundation in which they were even established (as seen in the recent decision to uphold the Defense of Marriage act based off of simple moral differences which deny a population of people their basic rights.
 

GAunderrated

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FEichinger said:
See, this is where I agree with the ruling: It is completely reasonable. The file does exist twice, the moment it is given to the "new owner" and there is nothing stopping you from keeping a copy yourself either. Both technically and morally, the idea of reselling a file is wrong.

This, however, has nothing to do with resale of used games (which is probably gonna be the most prevalent of reactions in this thread) that were acquired digitally. Games aren't sold as products anymore, but as binding licenses. For better or worse. This also means, however, that resale of a license can be doable. Technically, as well as morally as well as legally.

FoolKiller said:
By that reasoning, wouldn't you be guilty of violating copyright by moving songs from iTunes to your iPod or something similar with the non-Apple equivalents?
Reproduction for your own use is legal. As in: Both copies remain in your hands.
Well game companies have been pushing that they are selling "licenses" and not products for ages now so I hope that it does come to bite them in the ass.
 

evilneko

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Jun 16, 2011
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FoolKiller said:
I just love how the content in question is either licensed material or a product, but always favouring the company even if it contradicts itself.

The ruling as it stands doesn't make logical sense (not that anything to do with copyright law ever has).

The part that has me scratching my head is this:

...because digital music files must be embodied in a new material object following their transfer over the internet, the court determines that the embodiment of a digital music file on a new hard disk is a reproduction within the meaning of the Copyright Act.

By that reasoning, wouldn't you be guilty of violating copyright by moving songs from iTunes to your iPod or something similar with the non-Apple equivalents?
Exactly.

Copying for your own use is perfectly legal.

Here, we have ownership transfered to another party. That party now owns the file, and can copy it all they want. Ergo, they can copy it from your hard drive, to theirs.

What they've really got their panties in a wad over is there's no way to ensure that the original is destroyed and the previous owner retains no additional copies.
 

josemlopes

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But isnt the thing that you buy the key and not the actual content? If you sell the key even if you have the content copied in your PC you cant play it, the thing is I get why someone would want to sell a game (key) but to buy one used? It doesnt have less value then a new one meaning that the price would be the same, so why not buy the actual game new? The publisher doesnt need the key back because key are unlimited.
 

Something Amyss

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Dec 3, 2008
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And this is why digital media is the holy grail for businesses: we have no rights whatsoever.

thebobmaster said:
[insert comment about how Europe is far superior to the US, in legal terms]


OK, seriously, I have to side with the judge on this one. Used physical games are one thing. But when you can copy a game onto a blank CD-ROM, then sell the game to the used game retailer without actually losing your access to the game, it gets a bit trickier. Then again, I'm assuming this is done over the PC. It's even easier on a console. You just have to transfer the game over to a flash drive in that case, then voila, you now have a copy to keep, and another one to "trade in".
So you're against used CD sales, then? Even though those are legal?
 

FEichinger

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Aug 7, 2011
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GAunderrated said:
FEichinger said:
See, this is where I agree with the ruling: It is completely reasonable. The file does exist twice, the moment it is given to the "new owner" and there is nothing stopping you from keeping a copy yourself either. Both technically and morally, the idea of reselling a file is wrong.

This, however, has nothing to do with resale of used games (which is probably gonna be the most prevalent of reactions in this thread) that were acquired digitally. Games aren't sold as products anymore, but as binding licenses. For better or worse. This also means, however, that resale of a license can be doable. Technically, as well as morally as well as legally.

FoolKiller said:
By that reasoning, wouldn't you be guilty of violating copyright by moving songs from iTunes to your iPod or something similar with the non-Apple equivalents?
Reproduction for your own use is legal. As in: Both copies remain in your hands.
Well game companies have been pushing that they are selling "licenses" and not products for ages now so I hope that it does come to bite them in the ass.
The thing is, US law allows licenses to include clauses that prevent resale. Combine that with DRM platforms incapable of resale (You can't, say, remove a game from your Steam library and resell it), and it looks very unlikely that this will ever happen. But, as I said, it's doable. If it becomes a big thing outside the US (since US law doesn't apply in the rest of the world, as much as some people may believe), it may well be forced upon companies, for example. Heck, if Steam were to push it, it would most definitely happen, even if it took a couple of lawsuits to get it over with.
 

flarty

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FEichinger said:
See, this is where I agree with the ruling: It is completely reasonable. The file does exist twice, the moment it is given to the "new owner" and there is nothing stopping you from keeping a copy yourself either. Both technically and morally, the idea of reselling a file is wrong.
Yes because tape recorders are a figment of our collective imagination and never existed in the pre digital era.
 

Something Amyss

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Dec 3, 2008
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josemlopes said:
But isnt the thing that you buy the key and not the actual content? If you sell the key even if you have the content copied in your PC you cant play it, the thing is I get why someone would want to sell a game (key) but to buy one used? It doesnt have less value then a new one meaning that the price would be the same, so why not buy the actual game new? The publisher doesnt need the key back because key are unlimited.
Because people will invariably end up charging less despite your perception of "value".
 

Entitled

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FoolKiller said:
I just love how the content in question is either licensed material or a product, but always favouring the company even if it contradicts itself.
Not that the consumers' usual counterargument logic is any better: buying a content means it's "your property" therefore you are supposed to do what ever you want with it, juset like you could resell a car.

Except of course reproducing it in any way that is illegal by copyright law, because that would violate the creator's "Property" to the content that is alo your "property", and you wouldn't steal a car.

I'm wondering if from now on those people will just switch sides and argue that the right to limit used sales is also the creator's "property" after all, because the legal system says so.
 
Nov 28, 2007
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Zachary Amaranth said:
And this is why digital media is the holy grail for businesses: we have no rights whatsoever.

thebobmaster said:
[insert comment about how Europe is far superior to the US, in legal terms]


OK, seriously, I have to side with the judge on this one. Used physical games are one thing. But when you can copy a game onto a blank CD-ROM, then sell the game to the used game retailer without actually losing your access to the game, it gets a bit trickier. Then again, I'm assuming this is done over the PC. It's even easier on a console. You just have to transfer the game over to a flash drive in that case, then voila, you now have a copy to keep, and another one to "trade in".
So you're against used CD sales, then? Even though those are legal?
You have a fair point. There isn't much different logistically between copying a CD and copying a digital game. I didn't consider used CD's, as I have not really seen stores that sell them around where I live. I still feel this is a fair ruling, but I will admit that it isn't a perfect ruling.
 

Something Amyss

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Dec 3, 2008
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FEichinger said:
Combine that with DRM platforms incapable of resale
Irrelevant, as a court could order a company with such a platform to modify it. This isn't without precedent.
 

FEichinger

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Aug 7, 2011
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flarty said:
FEichinger said:
See, this is where I agree with the ruling: It is completely reasonable. The file does exist twice, the moment it is given to the "new owner" and there is nothing stopping you from keeping a copy yourself either. Both technically and morally, the idea of reselling a file is wrong.
Yes because tape recorders are a figment of our collective imagination and never existed in the pre digital era.
Recording and reselling (of physical goods) aren't related, however. A physical good can be resold without it being replicated beforehand. For digital resale, it has to be copied, this is a technical requirement.

Zachary Amaranth said:
FEichinger said:
Combine that with DRM platforms incapable of resale
Irrelevant, as a court could order a company with such a platform to modify it. This isn't without precedent.
Of course. It's just a case of the status quo not supporting it at all, and as such it is unlikely to happen. It's not impossible, but unlikely, is all I'm saying.
 

Quazimofo

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Upbeat Zombie said:
I would have to imagine further down the line the "first sale doctrine" should be updated, when it comes to the reproduction of digital content. Since it doesn't really seem like it was created with digital content in mind. And thus doesn't really work well as a law set for them.
evilneko said:
FoolKiller said:
I just love how the content in question is either licensed material or a product, but always favouring the company even if it contradicts itself.

The ruling as it stands doesn't make logical sense (not that anything to do with copyright law ever has).

The part that has me scratching my head is this:

...because digital music files must be embodied in a new material object following their transfer over the internet, the court determines that the embodiment of a digital music file on a new hard disk is a reproduction within the meaning of the Copyright Act.

By that reasoning, wouldn't you be guilty of violating copyright by moving songs from iTunes to your iPod or something similar with the non-Apple equivalents?
Exactly.

Copying for your own use is perfectly legal.

Here, we have ownership transfered to another party. That party now owns the file, and can copy it all they want. Ergo, they can copy it from your hard drive, to theirs.

What they've really got their panties in a wad over is there's no way to ensure that the original is destroyed and the previous owner retains no additional copies.
Which really is a serous problem, as it would take little effort or time to copy something. Were there a way to ensure that the original is destroyed or otherwise blocked from the seller's use (like if steam let you sell games to other people then deleted them from your computer AND your library), then I'm sure the ruling would have gone the other way.

As it stands, its not a perfect ruling as someone above me said, but it is fair based on the language and intent of the standing law.