Bruce Willis and smartphoneAfter a U.S. District Court in New York has ruled that the reselling of digital music by ReDigi violates the Copyright Act, fans and owners of collections of tunes may be wondering if there will be future markets for previously owned digital content.  In a recent online article, Michael Risch, an associate professor at Villanova Law School, scrutinizes the issue anew, examining a situation said to involve Bruce Willis and Apple, a purported tiff that turns over the Die Hard movies franchise legend and his inability to bequeath his extensive iTunes music library to his children.

While many iTunes users probably believe they buy their music outright, they, in fact, pay for a license to listen to tunes via an Apple device, such as the iPod or iPhone.  Which is where Willis and others may raise an argument that they should have the right to resell their music, as they can with a CD; fans have expressed exasperation with Apple’s terms and conditions for iTunes.

Their only work-around may be for them to leave an entire device to their survivors, bequeathing them, say, their Macbook or iPod; that’s because their music is linked to a specific iTunes account and there eventually would be issues if heirs want to transfer music to another device. There also are conditions on how many times they may download an individual song.Such restriction on consumers’ ability to transact as they wish with their music purchases magnifies how the 1976 Copyright Act fails to reflect technology’s rapid-fire change.  The court in the Redigi case recognized this, stating, “While technological change may have rendered Section 109(a) unsatisfactory to many contemporary observers and consumers, it has not rendered it ambiguous.” With more cases inevitably to follow challenging the rights to digital music, courts may be forced to tackle the fair-use doctrine as it applies to digital music resales. It also may become apparent to Congress that it needs to amend the statute.

But until then, Risch proposes a return to Digital Rights Management (DRM), technologies that limit uses of digital content and devices after sale and that are undesired by the content provider.  This gives providers control to recall content at will, in accord with a license or contract. Providers shouldn’t be allowed to offer content “for sale,” if its delivery and use is tied to a contract or via a DRM that renders licenses materials but does not give customers control over these, he says, noting, “This is simply false advertising that takes advantage of settled expectations of users, and well within the powers of the FTC, I believe.”

Beyond digital music comes the question of whether resale is allowed for other digital content, including games, films and books. Cases in both the U.S. and the European Union are making headway in clarifying what’s legal here. In March, the U.S. Supreme Court handed down a decision in Kirtsaeng v. Wiley that may prove key on resale of copyrighted material and the first-sale doctrine.  The court said the first-sale doctrine applies to copies of copyrighted works lawfully made abroad. John Wiley & Sons sued Thai native Supap Kirtsaeng over his sale of textbooks made outside of the United States and then imported into America.  While a Cornell University student Kirtsaeng got his relatives to buy then ship to him in the U.S. textbooks sold cheaper in Thailand. He then resold those texts on Ebay for a profit.

Another recent important decision by the Court of Justice of the European Union in Oracle v. UsedSoft seems to allow consumers to resell digital and physical software.  The court, under its ruling here, applied the doctrine of exhaustion or first sale to games. EU copyright laws give rights holders exclusive control on sales of the original and each and every individual copy of their works; under the doctrine of exhaustion, a holder’s exclusive distribution right over each copy of his product is “exhausted”  ( lapses) once that copy is first sold in the EU with his consent.  The court stated that the doctrine applies both to physical and digital games. And because the two means of distribution economically were comparable, the court saw no justification to treat them differently; that, therefore, permits a first-time digital or physical game buyer to sell it to a second customer, but only if he first-renders the game “unusable.” It’s unclear, of course, whether this European approach will gain traction in U.S. legal system.

Two more points worth considering in this discussion: As the carefully couched language above indicates, uncertainty prevails as to the Hollywood star (Willis is shown in an Andrew Walker photo with his smartphone) and the true extent of his pique with Apple and iTunes, as his wife took to social media to discount reports about it that started in the British tabloids. More to the point: Apple itself may be addressing the resale issue, via technology, according to some tea-leaf readers. We’ll see.