ReDigi, a company that lets users sell “used” iTunes tracks, got a lifeline from a U.S. District Court judge, who has rejected Capitol Records’ request for a preliminary order to shutter the firm. The judge ruled that Capitol failed to show it would suffer “irreparable harm” if ReDigi continued its operations until copyright issues raised by the entertainment giant can go to trial — though the judge did indicate Capitol is likely to prevail there .
The startup, launching last fall, operates by scanning a user’s hard drive to retrieve the song for sale there; its software then deletes that song from the user’s hard drive. After ReDigi’s victory, John Ossenmacher, ReDigi’s CEO, stated that “ReDigi is breaking down the barriers that have kept consumers from enjoying their intrinsic and lawful ownership rights to their digital purchases.” Although ReDigi has a verification system to discourage illegal copying of music, Ossenmacher has admitted that ReDigi has no way to ensure that users have not made copies of the songs they are selling on other hard drives.
ReDigi claims that the first sale doctrine, which permits an individual to sell, display, or dispose of the particular copy of a purchased copyrighted work, allows users to resell digital tracks just like it allows users to sell physical albums. Capitol argues that the difference between ReDigi and a store selling used music is that the firm is not selling the original product bought by the consumer but instead digital copies. Capitol’s argument seems to be that ReDigi is the equivalent of a used music store buying and re-selling burned copies of the original music purchased by the customer. That scenario appears unlikely to fall within the first sale doctrine.