EFF Explains Why You Should Be Allowed To Sell Promo CDs

from the first-sale-first-sale-first-sale dept

Last summer, a district court ruled that selling promo CDs is perfectly legal. This was an important ruling, because it reinforced the right of first sale -- which has been a part of copyright law for ages -- and it made it clear that companies couldn't wipe out the limits of copyright law simply by declaring them void. The case involved a guy, Troy Augusto, who was selling CDs on eBay. Many of the CDs were "promo" CDs that had been sent to reviewers and radio stations -- stamped with the words to the effect of "Promo: Not for Resale." I've got a few such CDs in my own collection.

Universal Music Group claimed that these CDs remained its property because of that stamp. However, that goes against the entire first sale doctrine concept -- which has always allowed individuals to resell copyrighted products that they possess. Universal's claim was that the stamp meant that it continued to own the CD, even though it never asked for such CDs back. If allowed, this would effectively let any company create their own copyright laws by simply stamping the content with the rules. So, forget the current, already ridiculous, term for copyright. New authors or musicians could just stamp every product with "Property of the content creator" and you would never actually own the product.

Luckily the court disagreed... but Universal has appealed, and the RIAA has filed a brief siding with UMG as well. The EFF has now filed its own brief, noting the ridiculous consequences of any ruling where Universal wins. Allowing Universal to win would effectively mean that all of the extremely important (and already diminished) limits found on copyright today no longer apply. That would be a travesty and go against everything that copyright was originally designed to represent.

Filed Under: promotional cds
Companies: eff, riaa, universal music


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  1. identicon
    Jerry Leichter, 1 Feb 2009 @ 11:53am

    Absurdities both ways

    This whole dispute has absurdities both ways.

    There is no doubt that I can produce a CD and sell it to you, under a contract that we both knowingly sign, that prevents you from reselling the CD. We could agree that you will only play the CD during nights when the moon is full. We could agree that you will only play the CD to people while trying to convince them that they, to, should buy a copy.

    None of this implicates copyright; none of it implicates the First Sale Doctrine. I could sell you a car on the same basis. That it would be nuts for you to *buy* a car encumbered by such a contract is neither here no there - if no one buys, the company dies, as it should.

    Should you violate our agreement and sell the CD anyway, say to a used CD store, I'm in violation of my contract and you can come after me. Whether the CD store is in any way bound my agreement is more complex. It's easy for them to say "well, we didn't enter into any agreement, we can do what we like". Fine claim, but a fence will say exactly the same thing. Nevertheless, receiving stolen property is a crime. The question comes down to whether the alleged fence should reasonably have known that whoever sold him the stuff wasn't authorized to do so.

    In this case, the merchandise is clearly labeled "not for resale", so the store can't deny knowledge of the agreement. On the other hand, there was typically no contract between the record company and whoever receives the sample records - they send these things out en masse. Also, it's been accepted practice in the industry for many years that these things get resold, and absent any kind of contract, one should certainly be entitled to rely on it.

    The record companies, at this very, very late date, are trying to establish a convention that never existed. If they seriously want to do this, they can - but they need to do the hard work: Sign actual contracts with whoever they distribute to, with agreements that the CD's remain he property of the record company. Put into place some kind of auditing procedure, where they have the right (which they should exercise) to come in and ask to see their CD's - or even take them back.

    Absent that kind of effort, they should be told "sorry, the horse left that barn years ago, as a result of your own actions - don't come to the courts now". And copyright law shouldn't enter into this at all, where the individual CD's are concerned. (They already have the right, under copyright law, to say the CD's can't be duplicated, performed in public, etc. That's true whether they've sold the CD's, rented them, or given them away.)

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