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EMI fails to secure summary judgement in ReDigi dispute

By CMU Editorial | Published on Tuesday 7 February 2012

EMI has failed to get a summary judgement against MP3 resale website ReDigi, meaning the case will now get a full court hearing, testing the digital company’s claim that it is possible for the bit of American copyright law that allows consumers to resell CDs to apply in the digital space.

As previously reported, ReDigi emerged on the scene this time last year, allowing users to resell their MP3 collections. It’s not the first time such a service has been proposed, though past efforts – most notably Bopaboo – didn’t stick around for long.

The problem with ReDigi, as far as copyright owners are concerned, is what’s to stop a seller selling the same MP3 again and again. And, if you want to be technical about it, even if the seller did delete his or her version of an MP3 once they’d sold a copy to one person, that doesn’t alter the fact that a mechanical copy of the file has been made without licence, which is different to reselling a CD (allowed in the US under the so called ‘first sale doctrine’), where no new copy is made.

For its part ReDigi insist that its technology both checks the authenticity of the original file (so, in theory, a user can’t download half a file-sharing network for free and then re-sell it) and ensures the seller deletes their copy after sale. The company also says its lawyers have given their business model the all clear. Though legal reps for labels doubt ReDigi’s technology would be capable of ensuring authenticity or file deletion, and as such interpret US copyright law on this issue very differently.

The Recording Industry Association Of America issued a cease and desist last year, but it was EMI which was first to file legal proceedings last month, asking the US courts to force ReDigi to remove any of its content from the resale platform, and to award damages. The major asked for a summary judgement, something that – as also previously reported – bothered Google somewhat, which feels that the ReDigi case raises some copyright questions relevant to the wider digital locker market.

They made a so called amicus curiae filing with the court last week requesting the judge ensure this case went to a full trial. Judge Richard Sullivan declined to accept Google’s input on the case, but yesterday pretty much concurred with the web giant when he decided that it would be inappropriate to find in EMI’s favour without giving its claim full consideration, mainly because he didn’t feel the major had proven “irreparable harm” in its initial legal papers.

ReDigi told the court that an immediate ruling in EMI’s favour would put the company out of business, and therefore welcomed yesterday’s decision, even though Sullivan also rejected its call for the case to be dismissed without delay.

According to the digital company’s statement on the hearing, Judge Sullivan said that this case centred on a “fascinating issue” that “raises a lot of technological and statutory issues”. The judge added that he expected the case, when it is fully considered in court, to cover various topics. Whether the aforementioned first sale doctrine applies on the net for starters, obviously, but also what the word ‘copy’ actually means in the context of US copyright law in the digital age, whether there is a ‘public performance’ when digital files are moved across the net, and what liabilities fall on the provider of file-transfer platforms and cloud-lockers if customers use them to infringe. If this case really does get to the bottom of all or any of those extra issues, it will be fascinating indeed.

Though an in-depth court-based discussion about the very nature of copyright on the internet sounds expensive, and presumably the digital start-up doesn’t want to spend all of the half a million dollars of funding it reportedly raised last summer on legal fees. Some in the digital start-up community may, therefore, wonder whether ReDigi will last the distance to truly test the principles at the heart of its business model.

Dmitry Shapiro, founder of now defunct YouTube cometitor Veoh, might reluctantly caution against taking on a well-funded major content owner on grey areas of American copyright law, his much previously reported legal fight with Universal Music putting him out of business, even though Veoh eventually won the court battle. Shapiro recently wrote about his experiences, as copyright issues occupied the front pages in America amid Wikipedia’s SOPA protest, and it makes for interesting reading.

Though, while the exact obligations of content-sharing platforms, when it comes to the takedown systems it operates to ensure protection under the Digital Millennium Copyright Act, are a very grey area indeed (or at least they were prior to the Veoh and subsequent Viacom v YouTube rulings), EMI might argue that the basic copyright issues in the ReDigi case are more straightforward, and that it won’t take too much legal debate to find the start-up is enabling copyright infringement. Though, of course, a quick resolution to that effect is no use to ReDigi, even if speed would cut legal costs.