New RIAA Argument: Throwing A Promo CD In The Garbage = Unauthorized Distribution

from the next-up:-picking-your-nose=distribution dept

Last summer, the EFF sued Universal Music Group, after UMG had eBay takedown the sales of certain CDs. The CDs were promotional CDs, purchased legitimately by a guy going to LA record stores. However, UMG claimed that the CDs, as promotional items, were still the property of Universal Music Group. The EFF charged that UMG was abusing the law, specifically by ignoring the right of first sale, which is enshrined in copyright law allowing you to resell CDs or other works that contain copyrighted material. In response, UMG has now filed a brief that says that throwing out a promotional CD is unauthorized distribution.

Effectively, UMG is saying that merely by putting some fine print on a CD, it can effectively “own” that CD forever. If the court agrees, this would have some rather stunning ramifications, effectively wiping out the first sale doctrine. Record labels could then include similar language on all CDs, not just promo CDs, and then basically create its own copyright rules, preventing any use other than what the record label decided to allow. That would seem to go against much of historical precedent (and basic common sense) surrounding copyright. Courts in the past have noted time and time again that just because you say something is true, it doesn’t mean it necessarily is true. Hopefully the court will make that point once again.

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Companies: eff, universal music

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Comments on “New RIAA Argument: Throwing A Promo CD In The Garbage = Unauthorized Distribution”

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60 Comments
ehrichweiss says:

Re: We should be so lucky

Except some software IS licensed legitimately.

I own several Silicon Graphics servers and the operating system is licensed specifically for the hardware you have purchased. The deal is that SGI actually takes care of it’s loyal customers, so if I bought a brand new server with the support contract and my hard drives crashed and somehow my install media was destroyed, I would make a single call to support and they’d have me a new copy overnight. No questions asked and completely for free(well, I might have to pay for the shipping). The thing is, you can use any copy of the install media as it is not tied into the system hardware-wise but you are forbidden by signed contract(they won’t sell to you without the signature) to sell any copies without the hardware they are assigned to.

Strangely, this sounds a bit strict but makes perfect sense and SGI are incredibly lenient about this even though they have the right to be incredibly nasty since they have signatures, and hence a fully legally binding contract.

Anonymous Coward says:

After reading the RIAA complaint one recognizes that what the RIAA is saying (1) is that since they did not sell or give the physical CD away but only loaned the physical CD to the recipient the CD are still property of the recording studios. (2) That the recording studio only licensed the CD to the perspective recipient to personally listen to. (3) That the recipient has agreed by accepting the CD to return the CD to the owner, the studio which sent the CD to the recipient, up on completion of usage by the recipient and that the recipient is not authorized to disposed of the owner’s, recording studio, by any other means.

Thus the basic question is who owns the CD?

obvioustroll says:

Re: Anonymous Coward not reading the law

1) is that since they did not sell or give the physical CD away but only loaned the physical CD to the recipient the CD are still property of the recording studios.

See, this is where they fail.
“According to the first sale doctrine, once a copyright owner has parted with ownership of a CD, book, or DVD, whether by sale, gift, or other disposition, they may not control further dispositions of that particular copy (including throwing it away).”

Whoops. See, they are parting with ownership to give the people the opportunity to listen to the music. These people then play the music on the air waves. It is effectively a gift or a barter in exchange for play time. You like the music, you play it, band gets very cheap publicity. It cost a CD and postage. Pretty much any common sense shows this to be a transaction.

You can loan someone a book. However when you delete all records of who has that book and really don’t care or ask for it back, ever, then you didn’t loan it, you gave it away and are not entitled to get it back. Trying to retroactively change the rules to force everyone to send back a book you “loaned” is shady at best.

Personally, I think that all the radio stations should have some fun with it.
They want to own those CDs and not let the stations throw them away?

Send em all back, COD.

When they suddenly have a few thousand metric tons of CDs show up in the mail with a bill and no place to keep them, we can see what they do. Bet you diving in their trash that day would be very profitable as they just gave up the rights to those CDs.

Alimas says:

Re: Re: Anonymous Coward not reading the law

“According to the first sale doctrine, once a copyright owner has parted with ownership of a CD, book, or DVD, whether by sale, gift, or other disposition, they may not control further dispositions of that particular copy (including throwing it away).”

That is where you fail.

They didn’t part with ownership. Lending a book is a great example. If I lend someone a book and even go so far as to label the book in a manner that clarifies I’m simply lending it out and he sells it, that isn’t legal. The purchaser also enters unsafe water as well since he just bought stolen goods. These goods happen to be “intellectual property”.

“However when you delete all records of who has that book…”

It is clear that UMG keeps a record of who they send these Promo CDs to as they were aware of Augusto’s past as a Promo CD recipient and the fact that he is no longer. And do you think they just call around and remake a new list every time they want to send out a Promo disc?

I can’t defend the garbage thing. Technically, I think it would be IP distribution, but its still really stupid to bring it up. Thats akin to suing someone for playing their car radio with the window down. They should be embarrassed for that one.

DanC says:

Re: Re: Re: Anonymous Coward not reading the law

That is where you fail.

They didn’t part with ownership. Lending a book is a great example.

And this is exactly the problem. If this is allowable, then there really isn’t anything to stop a book publisher from including a similar notice in its books. It allows for the circumvention of the first sale doctrine by telling people they’re purchasing a license instead of a product.

This is essentially the same debate over whether you can resell software, even if the EULA says you can’t. The closest a court case has come to determining this issue has been Softman vs. Adobe, but in that instance the EULA had never been agreed to.

In the case of UMG, it appears that they’re trying to put forth the notion that the CDs are on “indefinite loan” to the recipients. Hopefully the EFF wins this lawsuit, as a loss could have particularly damaging repercussions to consumer rights.

Anonymous Coward says:

Re: Re: Re:2 Anonymous Coward not reading the law

The difference between sale, rent, and lend.

In sale ownership is transferred.

Ownership did not transfer so there was no sale.

Rent ownership does not transfer and the owner receives money back for the borrower usage.

Lent ownership does not transfer with no rent collected.

RIAA position is that ownership was not transferred.

If CD were ordered to be disposed of by Post Office by throwing in trash question is did ownership transfer?

Obvious Troll says:

Re: Re: Re:3 Anonymous Coward not reading the law

You left one out and it is a major one.

The ACTUAL difference is between sale, rent, lend, AND GIFT.

Guess which matters and was conviently ignored.

If you send a bunch of CDs out, keep NO RECORD (they admit to this in their filing), have no expectation of having it returned (also admitted), do not attempt to get it back (admitted) and do not have any known examples of having one returned (again admitted) then it is NOT LENT. It is a gift.

Ownership transferred when it was gifted. First sale doctrine clearly covers gifting in its wording.

RIAA can claim whatever it wants. But as a promotional effort it was clearly sending them as “free gifts” with the understanding that the recipients would listen and possibly use the CD and in doing so promote their music.

If they had LENT the CDs they would have kept track of the people. (Whoever said they did is incorrect. They admit to otherwise in their court briefing.) They didn’t, they didn’t care about the people and admit the logistics of getting the CDs back would be too costly.

Well, if something is too costly you don’t do it. You don’t half-@ss it and expect the courts to do the work for you. They are trying to save money by forcing the taxpayers to pay to police their bad policies. Either don’t send out gifts and try to limit them, or spend the money to make it a proper “lend” and make them return it in a defined amount of time.

moe says:

Re: Re: Re: Anonymous Coward not reading the law

That’s an extremely weak claim. If the right of first sale includes the wording, “or other disposition”, then I think you can consider that they parted with ownership of the CD. If they send out tens of thousands of CDs all over the country, and do nothing to assert their ownership of the CDs, then they’ve parted with ownership.

Lending a book is a good example, you’re right. When you lend a book, there is an expectation that you’ll get the book back. When promo CDs are sent out there is no expectation that they’ll get the CDs back. The point of the promo CDs is that they’ll be out “in the wild” promoting the artist.

This is just the RIAA getting upset that there is a secondary market for their products, and they’re mad they can’t be a part of it.

BlowURmindBowel says:

Re: Re: Anonymous Coward not reading the law

Didn’t a bunch of people get together and do this to AOL with those damn junkmail AOL installer CDs back in the day?

IIRC they ended up sending like two palettes of AOL disks back to the head office.

Would be fun to do to the Record companies but I doubt it would accomplish much, unfortunately.

James says:

Re: Re:

When do you EVER “return the CD to the owner, the studio which sent the CD to the recipient, up on completion of usage by the recipient” after accepting the CD as a free promotional item? Free stuff is simply that, free stuff. If you hand me a disk because you are trying to promote your band, why would you sue if I later give that disk away to someone else to listen to? A)It only widens the spread of your initial campaign to advertise your music, and b) you were giving the disk away for FREE in the first place, fully intending to not see a profit from it. So if I turn around and make a few bucks on ebay for my effort to promote YOUR music, I think that is fair, and the recording label is no further behind except that someone else has gotten to listen to the music they were originially handing away for nothing as a promo, thus launching them ahead of the game. Open your eyes RIAA, idiots.

DanC says:

Re: Re: Re:

I always like to read criticism that provides no explanation. Just the typical “no, you’re wrong” without any actual substance. And we get bad punctuation and misspellings as well.

The U.S. government argued the case on behalf of the recording industry. The government stated that “BMG is a victim because it owns the discs, sells them with permission of the copyright owners, and controls the disposition of undeliverable discs.” Of course, how BMG retained ownership of the discs after they told the USPS to throw them out is still a bit of a mystery.

JustMe says:

Correction to the A/C

As are, apparently, spelling errors. “congradulations” ???

Perhaps you meant ‘congratulations’ ?

con·grat·u·la·tion
[kuhn-grach-uh-ley-shuhn or, often, -graj-, kuhng-]

–noun
1. the act of congratulating.
2. congratulations, an expression of joy in the success or good fortune of another.

–interjection
3. congratulations, (used to express joy in the success or good fortune of another): Congratulations! You have just won the lottery!

http://dictionary.reference.com/browse/congratulations

Pale Rider says:

Software lawyers at work -

Isn’t this what Microsoft started doing several years ago? You have a license to “use” the software, and only on one machine! You can’t give it away or even leave it installed on the machine it came on. Legally you can’t even uninstall it to install it on another machine. So I can buy the right to play this CD in my car, but not in my home? I wonder if I can let anyone else listen to it?

Anonymous Coward says:

After reading the complaint, I would argue that UMG effectively abandoned the cd’s and perhaps even the copywrited material. They admit they send out 10s of thousands, and admit that they do nothing to get them back, and do not expect to get them back. They state that disposing of them is not allowed, but that they have the right to the cds at all times.
lets sue them for the damage these cd’s do to the enviornment and make them pay to retrieve them from landfills. It is their property as they claim.

Steve R. (profile) says:

An Unintended Consequence

A point that we are overlooking is that content producers through this onerous claim that they still “own” the product are actually transferring a degree of liability to the end user. Specifically that the end-user has assumed responsibility for the proper care of their product.

You accidentally scratch the CD, have you now damaged their property and they would now feel entitled to compensation?

You loan the CD to a friend, you now owe the record company a “rental fee”.

Rose M. Welch says:

No, don't complain! Applaud!

They’re doing your job for you, Mike! The main reason this behaviour proliferates is because most people are pretty uninformed about things like this. They don’t understand alot of these issues, not do they care to. But the most stupid shit they do, the more people will get pissed off… Until the revolution comes and we kill all RIAA attorneys and generals suit-wearers. Muahaha! (Just kidding about the revolution part.)

But seriously, ignore what’s on paper, because it’s all grey area anyway, and do what you want with what you have purchased. If we keep doing it, eventually the market will change to suit us, as it is slowly doing now. Even Wal-Mart sells digital music that says you can copy it as many times as you like.

Wal-Mart says: “There are no restrictions on the number of computers or devices you can copy MP3s to, and no restrictions on the number of times you can burn them to a disc.”

Yay!

BlowURmindBowel says:

The funny thing...

To me the funny thing is that for most small/local/regional labels promo CDs are meant to be free (read: it is now your property, and it is free), they only have 4/5 tracks on them and they get handed out at shows and festivals ad nauseam.

I go to the Wakarusa Music Festival here in my home town every year, and every year I come home with around three dozen free CDs from bands that I am actually interested in listening to. The CDs themselves are mostly reasonably well produced and professionally pressed/manufactured on contract from the local/regional label…

And from what I can tell, these local/regional labels have grown several orders of magnitude (both in number, and size of each label) over the last ~10 years…

I wonder why? 😉

BlowURmindBowel says:

R U Serial?

OMG are you that bored of a person to take jabs at people because they correct other people’s grammar on the internet… You have to be one Insecure SOB…

Ohhh wait you might just be an DOUCEBAG… Sorry my bad Trollie McTrollington…

***Actually my post, your post, and the guy correcting spelling are all idiotically inane posts, I’m just not so petty as to not admit it. 😉

Ben (profile) says:

This could easily make the CD 'owner' responsable for cleanup costs

This could be used to rip the CD companies a ‘new one.’ What if “their” property was contaminated with something, and then disposed of in a place that needed remediation? wouldn’t they be required to remove (and then decontaminate them) thereby costing them millions of dollars?

BlowURmindBowel says:

Re: This could easily make the CD 'owner' responsable for cleanup costs

Theoretically yes, but I think that if CDs contained any extremely harmful substances we would have figured that out by now, and you would have to dispose of them at local hazmat collection sites, and there would be tons of PSAs explaining that you can’t throw CDs in the garbage, etc.

But then again, how often are you told that you “can’t throw batteries in the trash” as opposed to hearing that you “should recycle them”…

But having studied RCRA and CERCLA, there are tons of loopholes that allow corporations to weasel out of having to pony up to clean up sites they are responsible for contaminating, bankruptcy actually being one of the easiest believe it or not…

Bob Wyman (profile) says:

Don't US Mail laws apply here?

As I understand it, any unsolicited mail which is clearly addressed to you becomes your property on receipt and without limit. If the demo disks were sent as unsolicited mail then they would become property of the recipients. (i.e. If the demos were sent to a list of “known” reviewers or “music stores” — not to people who explicitly asked for the demos)

bob wyman

John (profile) says:

So much for CD's...

If the RIAA can actually get away with printing “this is ours forever” on regular CD’s, does this mean I ever owned the CD?

And does this mean that I can’t buy a CD and give it as a gift? Would I have to get the RIAA’s permission to give CD’s as Christmas gifts? Or would all of my recipients be treated as thieves for not paying for the CD’s?

I think I’ll just give people gift certificates to the music stores or iTunes.

Heart RIAA says:

Where's the RIAA

Article mentions UMG, why is RIAA in the headline? Oh, to help get people to read it.
Mike is slipping, but wait, his response will be that the RIAA reps all the majors. I know, I know, Mike is never wrong and loves to get everything for free as the method to get him to buy it. Yes, maybe cars should be free, houses, food and jobs, you know, so we can try them out, and if we like them, go back and buy something from one of those companies. I’m still waiting for my free Techdirt corporate report to help my company, you know, the ones we have to pay for.

Anonymous Coward says:

Re: this article is biased

companies send out promotional copies that CLEARLY say “not for sale. property of this company.”
That doesn’t necessarily make it so. Some people seem to have this bizarre idea that if something is written down it somehow becomes “law”. That isn’t so.

It is illegal to sell them.
Again, just because you and the record companies say so doesn’t make it so. You vastly overestimate your authority.

Debunked says:

Definitions Needed

Mike’s definition of bias quote:
Being biased implies some outside influence that biases you. There’s no outside influence on my posts. I simply write what I think. I won’t deny that they’re opinionated, but that’s different than bias.

Wikipedia definition:
http://en.wikipedia.org/wiki/Bias
Bias is a term used to describe a tendency or preference towards a particular perspective, ideology or result. All information and points of view have some form of bias. A person is generally said to be biased if the person’s output is influenced by inner biases, to the extent that one’s views is not subjectively considered neutral or objective.

Let the reader decide. Once again, for the record, I am biased according to the Wikipedia definition.

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