ReDigi and 'Used Digitial Music' Concept Struck Down in District Court; Capitol Records Aims to Sue Founders

We love used stuff over here at Music Times. We get that warm, fuzzy feeling whenever we shuffle through the racks at the record store, looking for long forgotten classic or newfound mystery disc. We like restoring old equipment to show off in our living room. We're not so sure how we feel about "used digital music" however. The curious topic is the basis for a series of lawsuits that have gone down between record companies and ReDigi, a web company specializing as a marketplace for quote-end-quote used mp3s.

ReDigi used the concept of the "first sale" doctrine, which has long been used to prevent copyright holders from legally attacking those selling used products via Craigslist or classified ads (or used car dealerships for that matter). U.S. District Judge Richard Sullivan struck down this notion with regard to ReDigi during 2013 however, writing that "the embodiment of a digital music file on a new hard disk is a reproduction." In other words, he argues that selling "used" mp3s isn't like selling a used CD; it's like copying that CD to a blank disc and selling that copy. The two mp3s are actually copies of files, the actual file isn't sent through the internet.

The judge's findings mean that ReDigi owes record labels and music publishers a lot of money for copying their copyrighted work. The Audio Home Recording Act ensures that producers of blank CDs and similar products must pay a statutory rate to cover the cost of theoretical duplication of copyrighted materials that are likely to occur. As ReDigi is now labelled as a wholesale reproducer, that means plenty of statutory rates unpaid up to this point.

ReDigi founders John Ossenmacher and Larry Rudolph kept the website up however, claiming that the site was now using "more advanced technology," according to The Hollywood Reporter.

The new suit brought by Capitol Records aims to sue not only ReDigi, but also Ossenmacher and Rudolph as they "personally conceived of the infringing business model." Sullivan is allowing the suit to move forward but the pair has yet to file an appeal.