A recent federal ruling distinguished between digital and physical media when it comes to the first sale doctrine

James Kang writes in IP Law Alert that in Capitol Records, LLC v. ReDiGi Inc., No. 12 Civ. 95 (S.D.N.Y. March 30, 2012), Judge Richard Sullivan declared that a file sent over the internet is not a simple transfer of the same “material object;” rather, it is a reproduction of the file, so the first sale doctrine does not apply. The first sale doctrine provides that once sold, a copy of a copyrighted work can be resold without the authorization of the copyright owner. 

It follows that the process of uploading and downloading of digital media files to be sold in ReDigi’s marketplace is defined at once as unauthorized reproductions and distribution of those reproductions. Accordingly, the Judge Sullivan “ruled that ReDigi violated Capitol’s digital media reproduction and distribution rights.”

ReDigi’s marketplace for “used” digital music files is similar to what Amazon is planning with their patent for an “electronic marketplace.” Both Amazon and ReDiGi software make sure copies of files uploaded to the marketplace are not retained on the original storage medium, which will probably form the basis of ReDigi’s appeal.