Is Selling A CD You Found In The Trash Copyright Infringement?

from the so-sayeth-the-courts dept

Various courts have held that by putting something in the trash, you are relinquishing your ownership of those goods. However, apparently that might not apply to music. William Patry has the story on an unfortunate decision by our court system, suggesting that if you find a CD in the trash and sell it you may be charged with copyright infringement. The story of the case is as follows: BMG famously offers a CD and DVD "club" that sends out new CDs and DVDs on a regular basis to subscribers. Sometimes those subscribers move and cannot be found or for whatever reason the discs are determined to be "undeliverable." BMG so devalues its own discs that it has told the post office to throw out the undeliverable discs, rather than spend the postage to have them sent back to BMG. The post office dumps the discs in its dumpsters -- at which point a Postal Service employee dumpster dives to rescue them. He then goes and sells those discs to local stores, cashing in to the tune of nearly $80,000. This gets discovered, and he gets charged with mail fraud before settling on charges of copyright infringement.

However, what no one seems to clearly explain is where the infringement is? BMG instructed the CDs to be thrown out. The Post Office threw them out. At that point, the property has been relinquished by BMG and the Post Office, so it would appear that anyone who finds the discs wouldn't be committing any kind of infringement (or, for that matter, fraud) in selling them. A lower court ruling was especially bizarre, in demanding that the guy give up all the money he earned to BMG due to the "lost opportunity" to BMG in selling the music. As we've discussed at length before a "lost opportunity" is not an actual loss and it's not a crime. It's simply a marketing challenge. Otherwise, just about any business could be guilty of creating a "lost opportunity" for any competitor. The pizza shop down the street creates a "lost opportunity" every time I eat there instead of the deli. Hell, just buying one musician's CD rather than another's creates a "lost opportunity." So, it's ridiculous to equate a "lost opportunity" to a crime -- and even worse when that "lost opportunity" was self-created by BMG choosing to throw out the discs.

Luckily, the Appeals Court tossed out the "lost opportunity" part, but as Patry notes, it doesn't appear that anyone questioned how the facts of this case could possibly be considered copyright infringement. Selling used CDs is considered to be perfectly legal and non-infringing. How is selling CDs that have been thrown in the garbage any different?

Filed Under: cds, copyright, first sale, garbage
Companies: bmg


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  1. identicon
    DanC, 14 Feb 2008 @ 8:42pm

    Re: Infringement of right to control first sale of

    Sorry for the previous triple post...kept getting timeouts.

    "Note that the First Sale doctrine may not permit the postal worker's "resale" of these discs, because the initial "sale" by the record club was never completed."

    The first sale doctrine would not apply here. BMG attempted to send the purchased discs to the customers, but were unable to deliver them. BMG then asked the USPS to dispose of the discs, which they were under no obligation to do.

    There was no transfer of property, so the first sale doctrine would not apply. The property was abandoned by BMG because they didn't want to pay for the return of the discs.

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