Absolutely Terrible Textbook Publishing Giant Pearson Wants To Make Everything Even Worse With NFTs

(Mis)Uses of Technology

from the making-nfts-even-worse dept

Pretty much everyone who has ever gone to college hates educational publishers. There’s an oligopoly of just five giant publishers, and they long ago learned that they are in the best market ever: the buyers of their textbooks (the students) have no choice and are forced to buy the books if their professors assign them — and more such books will get sold every semester that the professor requires it. Therefore, textbook prices are insane by any imaginable standard. And, for decades, they kept getting higher — massively outpacing tons of other goods. For unclear reasons, the never ending march upwards in book pricing finally seemed to hit a ceiling around 2016, and prices seem to have somewhat leveled out since then. This chart from the US Bureau of Labor Statistics is really pretty striking:

And, while publishers claim that the shift to digital textbooks (partially accelerating by remote learning during the pandemic) has resulted in a decline in student spending over the last five years, the College Board’s latest estimates are still that students will spend an average of $1240 per year on textbooks and supplies. That’s… a lot.

While there are some considerate professors out there who take into account the cost of textbooks (and a very rare few who will only require open access textbooks), most don’t seem to much care. They assign the books they want, the students are required to buy them, and so the publishers just keep raising the prices. Of course, the other way that students try to save money is by buying used textbooks. The savings are not always that significant, but when you’re talking about such large numbers, it can still make a huge difference.

Pearson, the largest of the Big 5 textbook publishers, also has a longstanding reputation for being particularly evil and uncaring. A decade ago, we wrote about how it had sent a single DMCA notice that resulted in 1.5 million teacher and student blogs being deleted. The company also was a key plaintiff in suing a startup that tried to offer free alternatives to super expensive textbooks (the lawsuit was eventually settled with the startup shifting business models, before it was acquired and its cheaper textbooks were shut down).

But, the most evil thing we’ve seen Pearson do was, back in 2019, when it announced it was so annoyed by the used textbook market digging into its never ending profits, and that it was going to switch all its textbooks to non-resalable digital textbooks. For the books it did print, it was going to try to shift to a rental only system. You pay for the textbook for a semester and then you return it. To Pearson. Who can resell it.

Since then, digital scarcity in the form of NFTs has come and gone as the new hotness. And while I still think there’s something interesting about NFTs (and am still working on a big paper about the pros and cons of NFTs), Pearson, in a manner only it could find reasonable, is embracing NFTs… to fuck over students even more.

The print editions of Pearson’s titles — such as “Fundamentals of Nursing,” which sells new for £57.99 ($70.88) — can be resold several times to other students without making the London-based education group any money. As more textbooks move to digital, CEO Andy Bird wants to change that. 

“In the analogue world, a Pearson textbook was resold up to seven times, and we would only participate in the first sale,” he told reporters following the London-based company’s interim results on Monday, talking about technological opportunities for the company. 

“The move to digital helps diminish the secondary market, and technology like blockchain and NFTs allows us to participate in every sale of that particular item as it goes through its life,” by tracking the material’s unique identifier on the ledger from “owner A to owner B to owner C,” said Bird, a former Disney executive.

I mean, I kinda have to hand it to Mr. Bird, the former Disney exec. Usually, these kinds of execs at least try to hide how fucking evil and greedy they are. Andy Bird doesn’t give a shit.

So, here’s the thing. The power of NFTs to track resales and allow the content creator to participate in later sales is often touted as a benefit of NFTs. But, the reason it’s seen that way is because when done for digital artwork it benefits the artist, who sometimes has to sell their works pretty cheaply upfront.

This, is not that.

This is a company that already has jacked up prices to ridiculous levels on a captive market that is effectively forced to purchase at whatever price the publisher sets — and now wanting to “diminish the secondary market” and to track and take a cut of any future sale.

That’s not the power of blockchains and NFTs. When people talk about the useful aspects of those technologies (to the extent there are useful aspects) it’s to enable greater ownership, not less. It’s to enable greater independence from giant corporations, not more. The reason NFT resale bounties work is because everyone feels that it’s fair, and it creates a seamless way to further compensate an artist who most buyers want to support. Not to funnel more cash to a giant, greedy, evil company that is already sucking students dry.

What Pearson is looking to do is to make everyone hate Pearson that much more.

Filed Under: andy bird, nft, nfts, resale, secondary market, textbooks
Companies: pearson

Appeals Court Hands ReDigi Another Loss; Says Reselling Mp3s Violates Copyright Law

Copyright

from the copies-of-copies dept

Things were never going to turn out well for mp3 remarketer ReDigi. Its business model — facilitating third party sales of digital files — worked better as a rhetorical device. It attempted — perhaps inadvertently — to obtain an answer to the eternal question: do you own the stuff you buy? When it comes to digital goods, the answer is almost always “no.” Platforms shut down. Rightsholders dissolve contracts. File formats lose support. And DRM is all over everything, frequently making pirated goods superior to those people pay for.

ReDigi claimed it could harness this untapped market, somehow providing a sales platform for infinite goods that wouldn’t allow sellers to sell the same goods infinitely. It claimed it could verify the destruction of the “original” files — something that could be easily circumvented by storing additional copies where ReDigi couldn’t “see” them.

Obviously, ReDigi was sued almost immediately. Records labels sought — but didn’t get — a permanent injunction blocking ReDigi from getting into the used mp3 business. But they did get a win in court roughly a year later. Five years ago, a federal court ruled in favor of record labels, finding that ReDigi’s business resulted in the production of new copies of files — something not allowed under copyright law. If ReDigi just allowed for the swap of physical media (hard drives, thumb drives with mp3s on them), perhaps it might be lawful. But even then, the court seemed unwilling to entertain the hardware option as anything but rhetorical

ReDigi appealed. Five years later, it finally has a decision in hand, but not the one it wanted. Eriq Gardner of The Hollywood Reporter has more details.

Writing for the panel of Second Circuit judges, Pierre Leval doesn’t buy ReDigi’s defense that there is no unauthorized reproduction at play when consumers use ReDigi to resell their digital files.

ReDigi argued that from a technical standpoint, its process of transfer shouldn’t be seen as making a reproduction because its system simultaneously causes packets of data to be removed from a consumer’s computer as those packets are transferred.

Leval responds, though, that during the transfer, a new copy of the digital file is “fixed…for a period of more than transitory duration,” and as such, the fixing creates a new phonorecord, i.e., a reproduction.

So much for the Right of First Sale, at least in this context. Copyright law is a “patchwork” (as Judge Leval calls It), a polite, appellate-level way of calling it a twisted mess of pre-digital-era artifacts that have resisted modernization thanks to legacy industry interference. There may be a path towards something more coherent, but those who can do something about it aren’t really doing anything about it. From the decision [PDF]:

The copyright statute is a patchwork, sometimes varying from clause to clause, as between provisions for which Congress has taken control, dictating both policy and the details of its execution, and provisions in which Congress approximately summarized common law developments, implicitly leaving further such development to the courts.

[…]

Notwithstanding the purported breadth of the first sale doctrine as originally articulated by the courts, see Bobbs?Merrill Co., 210 U.S. at 350 (“[T]he copyright statutes, while protecting the owner of the copyright in his right to multiply and sell his production, do not create the right to impose . . . a limitation at which the book shall be sold at retail by future purchasers . . . .”); Bureau of Nat’l Literature v. Sells, 211 F. 379, 381?82 (W.D. Wash. 1914) (finding no infringement, in light of first sale doctrine, where reseller re?bound used books and held them out as new books),

Congress, in promulgating § 109(a), adopted a narrower conception, which negates a claim of unauthorized distribution in violation of the author’s exclusive right under § 106(3), but not a claim of unauthorized reproduction in violation of the exclusive right provided by § 106(1). If ReDigi and its champions have persuasive arguments in support of the change of law they advocate, it is Congress they should persuade. We reject the invitation to substitute our judgment for that of Congress.

This is about as unhelpful as the laws being discussed. Congress left it to the courts “for further development.” The court is saying, “Take it up with Congress.” That leaves the Right of First Sale ripe for further development but both Congress and the courts feel the other party should handle it.

ReDigi’s case was never going to be the standard bearer for First Sale rights in the digital age. But it could have paved a path forward for better protections for consumers, allowing them to at least recoup some of what they’ve spent should a third party or rightsholder decide the stuff you paid for is no longer yours. Until that happens, digital media is worth less than the hardware storing it in terms of resale value.

Filed Under: copyright, first sale, resale, used mp3s
Companies: redigi

New Bill Designed To Stop Bogus Copyright Claims From Stopping You From Selling What You Own

Copyright

from the you-own-devices-act dept

We just wrote about an audio equipment manufacturer trying to argue that it was criminal for someone to resell their products. While this was obviously crazy, never underestimate the lengths that some companies will go through these days to try to block people from selling products they (thought they had) legally bought. And guess what tool they’re using to block you from actually owning the products you bought? Why copyright, of course. It’s yet another example of how copyright is often used to block property rights rather than to create them.

This has become especially popular among telco/networking equipment manufacturers. These companies ship hardware with software included — and then argue that you can’t actually do anything with that hardware — such as fix it or sell it — without their approval, because doing so would violate their copyright on the software. Earlier this year, there was a big lawsuit in which Avaya had sued a company for copyright infringement for merely servicing Avaya equipment. Many other equipment manufacturers have terms of service or “transfer” policies that either effectively block such sales, or (more commonly) include a bunch of hoops that everyone has to jump through just to sell the products you thought you owned. All because of the software that comes with the hardware. While this has mostly been focused on big enterprise systems, it’s not much of a stretch to think about how it might eventually apply elsewhere. With so many products being computerized these days, there will be software in lots of different hardware products — and imagine the havoc those companies could create if they tried to block the sale of these products based on copyright.

Of course, as we’ve discussed for years, in copyright there’s the right of first sale, which is supposed to let you sell your individual copy of a copyrighted work (it’s why you can resell a copy of a book you own, for example). But many companies have been trying to chip away at that right, and at least some in Congress want to stop this practice. Rep. Blake Farenthold — who I only just found out is an EFF member! — has now introduced a new bill called the You Own Devices Act, or YODA. While I tend to hate silly names for bills, this simple bill is an important reminder that when you buy a product, even if it has copyrighted software included in it, you should own it. The key part of the bill:

…if a computer program enables any part of a machine or other product to operate, the owner of the machine or other product is entitled to transfer an authorized copy of the computer program, or the right to obtain such copy, when the owner sells, leases, or otherwise transfers the machine or other product to another person. The right to transfer provided under this subsection may not be waived by any agreement.

Realistically, this is just reinforcing the first sale doctrine, and it’s ridiculous that it needs to be reinforced, but hopefully it can block out some of the questionable shenanigans by some companies.

The bill further makes sure that even if someone sells or transfers such equipment, that the new owners are still allowed to receive updates and security patches:

Any right to receive modifications to the computer program… relating in whole or in part to security or error correction that applied to the owner of the machine or other product… shall apply to the person to whom the machine or product and the copy of the computer program are transferred.

While it’s ridiculous enough that this bill is even needed, it’s nice to see at least some good copyright reforms popping up.

Filed Under: blake farenthold, copyright, equipment, first sale, ownership, property, property rights, resale, resellers, yoda, you own devices

Copyright And The End Of Property Rights

Say That Again

from the why-copyright-is-not-property dept

Yes, we’ve had the debate over and over and over again during the years (so much so that I’m not even going to dig up the links) concerning whether or not copyright is like “property.” However, reading an article by Alex Cummings on “the end of ownership,” it really drives home why copyright can often be anti-property rights, in that it takes away the standard types of “rights” that people have in property they’ve purchased. Cummings’ piece focuses on the secondary market for copyright-covered content, and how the content industries have been trying for over a century to stamp such things out, but were long held back by important concepts like the first sale right. However, in an all digital world, they’re having a lot more luck in killing off secondary markets:

Congress declined to heed the industry’s cries in 1906, but the issue of how consumers may use copyrighted works has cropped up and again. In the 1930s some record companies placed labels on their discs that said they were for “home use only”—not for playing on the radio. The courts rejected this restriction and sided with broadcasters. In the early 1980s, the music industry successfully lobbied Congress to pass the Record Rental Amendment, ensuring that a Blockbuster-like store for renting music would never emerge.

And, of course, he discusses things like the ReDigi case, which basically said even if you purchased a digital item, you have no right to resell it. And the impact of all of this can be pretty broad, going well beyond just digital files, to a question of whether or not you’ll really be able to “own” anything you purchase, because companies are increasingly using copyright to stop your basic ownership rights:

Today, we see a renewed attack on the rights of consumers by big business. Overly zealous regulation means that consumers are essentially barred from “unlocking” a cell phone, or severing the device from its original wireless carrier. Critics warn that such restrictions not only limit the rights of consumers but threaten to stifle old-fashioned tinkering and innovation. It is as if Ford told customers that they can’t pop the hood of their car and mess around its inner workings (which is how the world got NASCAR, incidentally).

How far should a phone company’s power extend into our personal lives when we buy one of their products? When you buy a phone or an MP3, is it really yours—or has a company just loaned it to you with a laundry list of stipulations and provisos? The age of cloud computing is upon us, and soon most of our books, movies, and musics might have no material form. We may discover that buying something no longer means owning it in any meaningful sense—and our stuff isn’t really ours anymore.

When you begin to think about all of those things — many of which are already happening — you begin to see just how anti-property rights copyright can be at times. Some of this, you could argue, is copyright misuse — individuals and companies stretching the clear intent of copyright law to their own advantage — but some of it seems to be part of the design of copyright law: to restrict all sorts of things you can do with your own property. It’s difficult to see how strong supporters of property rights can also claim that copyright is good for property rights when you look at how many ways it seems to attack those basic concepts, and leads to a world where many of the things you “buy” you no longer own.

Filed Under: copyright, first sale, property rights, resale

Should Google, Amazon And Others Be Able To Lock Up New Generic Top Level Domains For Their Own Use?

(Mis)Uses of Technology

from the wasn't-quite-the-idea... dept

For many years, we’ve noted that the entire setup of ICANN rolling out new top level domains (TLDs) was a complete joke, often driven by ICANN members who were in positions to be the registrars and registers for those new domains. Thus, all they seemed to do was create money out of thin air for those companies, since there was no actual demand for the TLDs, but companies felt obligated to buy them up anyway, to “keep them out of the hands” of critics, scammers or others. And, certainly a big fear when ICANN decided to offer up its big “generic TLD” setup, whereby anyone could make a play for any new TLD, was that the whole thing was a boondoggle for domain registers and registrars with which to set up a whole bunch of new tollbooths.

However, a funny thing happened along the way. While there certainly were a bunch of those kinds of TLDs applied for (many with competing claims fighting for the right to cash in), what became more interesting was the fact that the list of applications was absolutely dominated by Google and Amazon seeking to gain control over a very long list of TLDs. In fact, we noted that in many cases, Google and Amazon were lined up head to head competing over who would gain control over those TLDs. For example, they’re competing with each other (and with some others) for the rights to .book, .shop, .store, .free, .game, .search, .play, .movie, .show, .mail, .map, .spot, .talk, .wow, .you and .cloud. And both of those companies are going for a bunch of others where they’re not competing with each other. Google, for example, wants (among other things) .car, .dad, .mom, .dog, .family, .fyi, .plus, .tour, .prod, .here, .prof, .phd, meme., .lol, .day, .love and more.

As you look down the list, you begin to realize that while the initial fear of registers and registrars shaking down everyone to buy new domain names to “protect” their trademarks was a legitimate concern, there was a second serious concern as well: that a bunch of these new gTLDs were not being applied for to set up a registry where anyone could obtain those kinds of domains, but rather to lock them up for one company’s use. And while Amazon and Google are the most prominent players here, lots of other companies jumped in as well. Hasbro wants .transformers. Johnson and Johnson wants .baby (so do a bunch of others). Ralph Lauren wants .polo. Travelers Insurance wants the completely ridiculous .redumbrella, while Nationwide Insurance wants .onyourside. Monster Cable (of course) wants .monster.

While some of those more specific ones wouldn’t have any demand for anyone else to register anyway, there is a growing concern that companies might lock up certain TLDs, rather than make them available for registering. I’m sure lots of car companies would like theirname.car. But would that be possible?

Apparently, ICANN — whose boss has already admitted that they’re in way over their heads on these new gTLDs — is now considering whether or not such a use of a gTLD should even be allowed.

But companies such as Amazon, Google, Goodyear, L’Oreal and others also applied for a wide array of words and indicated that they would like to operate the registry as “closed” — meaning they may not allow other firms to buy what are known as second-level domains.

Clearly, companies want to own and control generic words as domains so that they can offer their services. But with that comes the possibility of blocking competitors who want to attach their brand to a term. For example, Ford might want to buy ford.truck but be blocked from doing so by the owner of .truck.

The article quotes someone from a hosting firm who notes that “It is inherently in the public interest to allow access to … new [generic top-level domains] to the whole of the Internet Community, e.g., .BLOG, .MUSIC, .CLOUD.”

Of course, there is the flipside to this argument as well — such TLDs that are simply locked up for a single company or service are also not on the market, meaning that they’re not another in the long list of domains companies feel they “need to buy” purely for defensive reasons. Either way, at least one (still unnamed) applicant who is competing with a bunch of these companies for a few of the new gTLDs is hiring people to lobby Congress and the EU Parliament not to allow firms to lock up any new gTLD.

In the end, I think our original conclusion still stands: the whole gTLD process appears to be a continuing boondoggle for certain companies, whether it’s to lock up certain TLDs or to sell off domains to people and companies who don’t really want them, but feel compelled to pay up anyway.

Filed Under: icann, resale, single use, top level domains
Companies: amazon, google, icann

EU Court Says, Yes, You Can Resell Your Software, Even If The Software Company Says You Can't

Legal Issues

from the good-for-them dept

You may remember that a couple years ago, an appeals court in the US ruled that, when dealing with software, as long as the provider calls what it sells “a license” rather than a “sale” it can take away your first sale rights. As you hopefully know, first sale rights are what let you resell goods that have copyright-covered material in them — such as books — without asking for permission from the copyright holder. However, for reasons that still don’t make any sense, the 9th Circuit seems to think that as long as something is purely digital, first sale no longer applies.

The Supreme Court refused to hear the appeal, so while technically the ruling still only applies in the 9th Circuit, it’s what most consider to be the state of the law in the US (there is always the possibility a different circuit court could disagree and it could go back to the Supreme Court — and one could argue that some other rulings in the 9th Circuit already conflict — but for now, the Autodesk case is widely considered the standard). There is, also, the upcoming ReDigi case, of which there’s a decent profile in the Boston Globe — but that’s focused on music, and it’s not entirely clear how that one will come out either.

Over in Europe, however, it appears that the European Court of Justice (who has been pushing out some relatively insightful rulings on copyright issues lately) seems to recognize just how ridiculous the 9th Circuit’s view on first sale and software really is. In a new ruling, it has upheld the right of first sale on software, basically saying that you are buying a license and that license is resellable.

The specific case involved a company, UsedSoft, that was trying to create a market in reselling used software. Oracle sued, claiming that its license agreement specifically stated that it could not be resold. However, the court found that the right of first sale applied. In the court’s language, it talks about copyright “exhaustion” which is the idea that once you’ve sold something you’ve “exhausted” your right to control it.

It makes no difference, in a situation such as that at issue in the main proceedings, whether the copy of the computer program was made available to the customer by the rightholder concerned by means of a download from the rightholder’s website or by means of a material medium such as a CD-ROM or DVD. Even if, in the latter case too, the rightholder formally separates the customer’s right to use the copy of the program supplied from the operation of transferring the copy of the program to the customer on a material medium, the operation of downloading from that medium a copy of the computer program and that of concluding a licence agreement remain inseparable from the point of view of the acquirer, for the reasons set out in paragraph 44 above. Since an acquirer who downloads a copy of the program concerned by means of a material medium such as a CD-ROM or DVD and concludes a licence agreement for that copy receives the right to use the copy for an unlimited period in return for payment of a fee, it must be considered that those two operations likewise involve, in the case of the making available of a copy of the computer program concerned by means of a material medium such as a CD-ROM or DVD, the transfer of the right of ownership of that copy.

There are some interesting side notes on this. First, the court also rules that if Oracle promised free maintenance updates to the original licensee, it must continue to provide those to whomever purchased the “used” software. However, it also puts a couple of limitations on this. The first one is somewhat obvious: the seller of the used license can no longer be using the software. Oracle argued that this would be hard to track, but the court rightly points out that this is the same issue that those who sell software on CD-ROMs and DVDs face, but they figure out how to survive:

As Oracle rightly observes, ascertaining whether such a copy has been made unusable may prove difficult. However, a copyright holder who distributes copies of a computer program on a material medium such as a CD-ROM or DVD is faced with the same problem, since it is only with great difficulty that he can make sure that the original acquirer has not made copies of the program which he will continue to use after selling his material medium. To solve that problem, it is permissible for the distributor – whether ‘classic’ or ‘digital’ – to make use of technical protective measures such as product keys.

Separately, however, the court ruled that you cannot divvy up the number of seats in a license and sell them individually. That is, if you buy a 100 seat license to some software, and are only using 50, you can’t then sell just those other 50 seats. This ruling says that the first sale only applies to the entire license agreement, basically.

There is some disagreement as to how “big” an impact this ruling will have. To be honest, I’m not convinced that the overall impact will be that large, but I think it is a good thing that the court appears to recognize that you cannot contract away certain rights granted to you under copyright. Copyright holders have long tried to remove the limitations and exceptions of copyright law through contracts and “licenses.” Recognizing that those limitations and exceptions really do exist is important, and it’s good to see the EU Court of Justice release a clear ruling on that issue.

Filed Under: europe, european court of justice, first sale, resale, scotus, software license
Companies: oracle, usedsoft

Speak Out Against Copyright Holders Destroying True Property Rights

Copyright

from the can-you-resell-your-stuff? dept

For a while now, we’ve been following a series of very scary court cases that could take away your ability to sell physical products you own, by using a bizarre interpretation of copyright law by the courts. You can click back on that link to read some of the background, but the short version is that courts are suggesting that if a physical product is manufactured outside the US, but anywhere on it includes something covered by copyright (an etching, content, software, etc.) then the entire product cannot be sold without permission from the copyright holder. The reasoning makes so little sense as to be unbelievable. Basically, it says that those products weren’t made under US copyright law — so they don’t get “first sale” rights — but they are still covered by copyright law, so selling them is copyright infringement.

This is nonsensical for any number of reasons. Unfortunately, the Supreme Court is about to hear the latest such case, after ending up with a split court the last time around. The reason it was split was because Justice Kagan recused herself, due to being involved in the case prior to becoming a Justice. Her involvement? Penning the filing of the US government against first sale rights. So it’s very possible that she’ll continue to retain that viewpoint on the court and basically kill off your ability to resell any good manufactured outside the US without permission. This is scary stuff.

While the issue is before the court, it’s still important to get people to speak out about this. A few public interest groups have put together a petition site called You’ve Been Owned: Don’t Let Copyright Trolls Steal Our Property Rights! and Citizens for Ownership Rights. The goal is to get the Obama administration to actually recommend preserving first sale rights (contrary to its earlier position). And, failing that, get Congress to change the laws to fix this problem which will drive many American manufacturers to move overseas. This is, of course, part of the real problem: the language of the statute is awkward in a way that lets the court come to a completely nonsensical and contradictory result.

What’s important to recognize is that, for all the talk by copyright maximalists to falsely claim that copyright is no different than real property, and to insist we must “defend property rights” for copyright, here’s a true case of property rights being under attack — and it’s because of an overly aggressive use of copyright. The idea that you don’t actually own what you bought is an anathema to true property rights. That companies may be able to use copyright law to block you from selling used goods is a massive encroachment on individuals’ property rights. If all those copyright maximalists truly believed in property rights (rather than the truth: that they support a government granted monopoly privilege that benefits themselves) they, too, would support this effort against the demolition of first sale rights.

Filed Under: first sale doctrine, property, resale, scotus

Supreme Court To Review If It's Legal To Resell A Book You Bought Abroad

Legal Issues

from the first-sale-ftw dept

This isn’t a huge surprise, but it’s good to see that the Supreme Court has agreed to hear an important case regarding the first sale doctrine in copyright law, and whether or not it applies to products made outside the US. The specific case is one we’ve been covering, involving a guy, Sudap Kirtsaeng, who was (legally) buying textbooks that were sold in Asia, and then reselling them in the US. Under the first sale doctrine this should be perfectly legal. But… due to a twisted interpretation of copyright law, a 2nd Circuit appeals court went against Kirtsaeng, siding instead with publisher John Wiley. The issue is that the law says that first sale applies to copyrights to products made “under this” law. And the argument is that a product made outside the US may have copyright, but it isn’t made “under” US copyright law, and thus it doesn’t qualify.

As the dissenting judge in the 2nd Circuit noted, this interpretation doesn’t make any sense. The law doesn’t say anything about location, just about whether or not it was “manufactured lawfully” under the terms of the law. So, as the judge noted, as long as the product can be subject to US copyright law, then first sale should apply. This makes sense, and hopefully the Supreme Court agrees.

Of course, the Supreme Court has addressed this to some extent. The 9th Circuit had ruled similarly in the Omega/Costco case, and while the Supreme Court had taken the case, Justice Kagan recused herself from that case, because she had said that the first sale doctrine should not apply to foreign goods. And, in the end, the court split down the middle. So that means that, as a deciding vote, there’s a reasonable worry that Kagan will again say that the First Sale doctrine does not apply to foreign goods.

This is a dangerous and stupid interpretation of the law. It will cause tremendous trouble for anyone trying to sell pretty much any product made outside the US, because makers can claim that no one can resell such products without getting a new license. It will also drive more works to be made offshore, since (especially the copyright legacy players) will look to completely get rid of the first sale doctrine by “manufacturing” everything offshore. Hopefully, the Supreme Court recognizes the ridiculousness of such a result, but the result in the Omega case was not encouraging.

Filed Under: first sale doctrine, resale, scotus

Judge Denies Injunction Against MP3 Reseller Due To Lack Of Irreparable Harm… But Says EMI's Arguments Compelling

Copyright

from the first-sale-is-dead dept

I’ve said before that I’m skeptical of the idea behind ReDigi — a seller of “used” mp3s. The company claims it has a system to make sure that if you sell a music file you own, that they then make sure it’s deleted from your computer. This just seems dumb for a variety of reasons — some economic, some technological and some legal. But, most of all, I just don’t see people caring enough to make this a valid business. Either way, whether it’s dumb or not, the RIAA couldn’t let the company actually try something new… so, of course it sued, with EMI subsidiary Capitol Records taking the lead on the case.

Somewhat surprisingly, the judge refused to issue the injunction, calling the case “fascinating” and noting that there were some serious issues to be dealt with concerning first sale rights around copyright (whether or not you can sell a product you bought that is covered by copyright). However, the judge also made it clear that he thinks that the record labels are likely to win in the end, saying that their arguments “look to be compelling.” He just didn’t issue the injunction because there was no evidence of irreparable harm if the site stayed up, as detailed in the transcript embedded below.

Filed Under: copyright, first sale, markets, mp3s, resale
Companies: capitol records, emi, redigi, riaa

As Expected, RIAA Threatens Site That Claims To Let You Sell Used MP3s

Copyright

from the dumb-in-almost-every-direction dept

Earlier this year, we wrote yet another attempt (and there have been a few) to set up a system for “selling used mp3s.” It seems like a pretty pointless idea for a few reasons. First, why bother? Second, all the convoluted and annoying systems the company puts in place to try to make this “legal” just makes it annoying and useless. But, third, as we noted at the time, there was no way that the RIAA would let this happen.

And, indeed, the RIAA is now demanding that ReDigi stop allowing for the sale of used mp3s. I’m having trouble thinking which is the dumber idea: trying to set up a convoluted and useless marketplace for selling “used” MP3s (something almost no one will want to do), or the RIAA even bothering to call extra attention to ReDigi by threatening and potentially suing.

A tip to the RIAA: this was dumb. Almost no one cares about or was using ReDigi anyway. It would have just faded away. By threatening, you bring them back into the limelight. On top of that, you (yet again) make yourselves look like clueless luddites who wish to wipe out the First Sale doctrine. Even worse, you could end up in a lawsuit that reminds you that the First Sale doctrine does exist, and is recognized by the courts, and you could establish a precedent that “reselling” used digital content is legal. So why bother, other than this bizarre and shortsighted infatuation with the idea that if anyone, anywhere benefits without you getting a slice, it must be illegal?

Filed Under: first sale, licensing, mp3s, music, resale
Companies: redigi, riaa