Rebalancing at Resale:: Redigi, Royalties, and the Digital Secondary Market
2013; Oxford University Press; Volume: 93; Issue: 5 Linguagem: Inglês
ISSN
0006-8047
Autores Tópico(s)Intellectual Property Law
ResumoThis Note explores the various legal and policy considerations underlying resale of digital works against the backdrop of the ReDigi litigation. It considers the history and evolution of the first sale exception, the provision of copyright law that traditionally permits owners of lawfully acquired copies to resell them without first seeking the copyright holder's permission. This Note analyzes the conflicting conclusions drawn by courts and commentators with respect to digital resale. The ReDigi court, for example, held squarely that digital resale is impermissible, in part because the first sale exception is inapplicable to digital works. Some scholars, on the other hand, insist that digital resale is decidedly permissible as a matter of public policy and common law precedent. Finding both viewpoints inadequate, this Note concludes that the secondary markets enabled by the first sale exception continue to serve important purposes in the digital world and they must be preserved. To do so, Congress must rebalance the interests of copyright holders and consumers - that is to say, the public - by amending the Copyright Act to incorporate a resale royalty. The digital environment presents unique risks to copyright holders. A resale royalty can offset those risks and compensate copyright holders for the continued exploitation of their digital works. This Note then proposes a model for such a resale royalty scheme, looking both to proposed and existing resale royalties in the visual art context and to current royalties assessed and collected for digital performances of sound recordings. It concludes that a digital resale royalty, as part of a larger goal of preserving secondary markets and broadening the first sale exception to encompass digital works, effectively and fairly balances the novel and legitimate concerns of copyright holders with the traditional and important consumer ability to dispense with unwanted property, albeit digital.INTRODUCTIONOn February 6, 2012, an attorney for Capitol Records stood before the Honorable Judge Richard Sullivan of the United States District Court for the Southern District of New York and accused an upstart technology company of up . . . Pandora's box.1 Just one month before, Capitol Records filed suit against ReDigi, Inc. (ReDigi), a newcomer seeking to create an online resale marketplace for digital versions of music and books.2 The lawsuit followed a cease-and-desist demand sent to ReDigi by the Recording Industry Association of America (RIAA), a trade group of which Capitol Records is a member,3 claiming that ReDigi's practices constitute[] willful copyright infringement.4 ReDigi's efforts to create a resale market for digital versions of legally purchased works aim only to bring a privilege that consumers frequently exercise offline - namely, the ability to resell books, CDs, DVDs, etc. - to the online environment. Given the recording industry's history of resistance to new technologies and business models,5 it is perhaps unsurprising that the industry might feel threatened by ReDigi. In likening ReDigi's efforts to the opening of Pandora's Box, however, Capitol suggests that the emergence of secondary markets for digital works spells chaos for the recording industry. Together with RIAA, Capitol appears determined to keep consumers out of the used record shop of the future.This Note explores the various legal and policy considerations underlying resale of digital works6 against the backdrop of the ReDigi litigation. It considers the history and evolution of the first sale exception, the provision of copyright law that traditionally permits owners of lawfully acquired copies to resell them without first seeking the copyright holder's permission.7 This Note analyzes the conflicting conclusions drawn by courts and commentators with respect to digital resale. The ReDigi court, for example, held squarely that digital resale is impermissible, in part, because the first sale exception is inapplicable to digital works. …
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