Ben Graham

That box of dusty records might sell for a hundred dollars at a garage sale, but what’s the value of the hard drive full of mp3s? The answer may be nothing.

The first-sale doctrine is what makes your vinyl valuable. It allows buyers who legally own a copyrighted work to become sellers and redistribute the work. We make use of the first-sale doctrine every day as CDs, paintings, and books trade hands. After the first sale, the copyright holder retains the right to reproduce the work, but the buyer gains the right to redistribute her own copy. Without the first-sale doctrine, you couldn’t trade your vinyl for cash.

A case pending in the Southern District of New York takes up the application of the first-sale doctrine to the resale of digital music. Defendant ReDigi, Inc. created a service that allows users to buy and sell digital music in an online marketplace. Plaintiff Capitol Records argues that the service reproduces the music and creates unauthorized copies. This, Capitol argues, infringes on its copyrights.

A problem of law or a problem of technology?

Capitol could have argued its case in (at least) two different ways: one legal, the other technological.

As a matter of law, it could have argued that digital music should not fall under the first-sale doctrine. Were they to argue that you and I don’t actually own the digital music but had merely licensed it, then the first-sale doctrine wouldn’t apply. (The Ninth Circuit, for instance, has held that users of the design program Autodesk have merely licensed the software and can’t resell it.)

Capitol’s actual argument, however, turns on the technology. You and I might own the digital music, but ReDigi’s service makes copies of the files when it sells them. Copying isn’t allowed by the first-sale doctrine, so the service is illegal.

Misunderstanding the technology

The question of copying reveals the clash between a tangible good paradigm and the world of digital media. Consider ReDigi’s response to Capitol’s argument:

“There is no copy involved,” ReDigi’s lawyer, Gary Adelman, told Sullivan. “The actual file is being transported. That’s how the technology works.” (via BusinessWeek)

In fact, that’s not how the technology works. When you buy a song from iTunes, you aren’t transporting one copy of the song from Apple’s warehouse to your computer. The idea of transporting goods is a holdover from the tangible good paradigm. We transport books and CDs; we load them onto trucks and send them on airplanes. Digital music doesn’t move that way. Apple doesn’t store 16 billion music files in a digital warehouse waiting to be shipped. Instead, the software is arranging the bits and bytes on your computer to mirror the file on Apple’s server. It’s making a copy.

But computers make copies all the time. Consider what happens when I download a song on iTunes. The file is copied from Apple’s servers to my hard drive. It is then synced wirelessly to my phone and backed up on my external hard drive, making two more copies. When I click on the file to play the song, it is loaded into my computer’s RAM, resulting in yet another copy of the digital data.

When a user loads a song into ReDigi to make it available for resale, the file is transferred to ReDigi’s server. Once the transfer is complete, the original file is deleted. Capitol is right that a copy is created during this process – but not because it is being reproduced. It’s simply how data is transferred.

Understanding the technology argument matters for issues in the law – is the sense of “copying” used in the first-sale doctrine the same as what takes place in my computer? While copying a CD clearly runs afoul of copyright restrictions, copying digital media is an essential element of how computers function. Maybe “copying” is a misnomer.