For years, up until about 10 years back when the digital music age started replacing actual music shopping, music collectors such as myself would find that cool underground record store in your local big city and scour its rows of CDs for some gems. But there were also special types of CDs stamped with gold lettering that said something to the effect of “property of the record company” and the usual warnings that you could be punished for selling them.
At the Boston place I went to, they were on sale for an incredibly low $6 usually and sometimes were available to purchase (with our without finished art work) weeks before the album was supposed to come out.
I always thought the selling and buying of such CDs was pretty bad-ass and was proud to find and partake in such activity. But in the back of my mind, I always thought there was a chance that the days of such transactions would legally come to an end.
According to the Ninth Circuit Court of Appeals last week, however, this will NOT be the case, I am happy to report.
In 2007, mega record company Universal Music Group (UMG) sued a music seller named Troy Augusto, who made money selling promo discs on eBay they gave him, saying that doing so violated the company’s licensing agreement banning any sale of such copies. In UMG vs. Augusto, however, the Ninth Court held up a 2008 lower court ruling in favor of Augusto that said promos were “gifts” under federal law, with this one also ruling in his favor that “having just a stamp on a CD label cannot a make a recipient abide by a licensing agreement. As a result, individuals may resell promotional CDs as they wish, regardless of warnings.”
UMG tried to get away with the weak argument that they transferred the license of these promos to Augusto and that he therefore violated copyright law bey reselling them on eBay, when in actuality they transferred not a license but ownership of those discs to him.
The other big legal issue here was whether the “first sale doctrine” protected Augusto, which says that consumers (or purchasers) can do what they want with items like music CDs, DVDs or books after they get transferred to them. The Court ruled it did, so in this case, the original copyright owner (UMG) lost its ability to control sales of its items once it gave them to another person like Augusto.
This news bodes well not just for music collectors but for music reviewers (such as myself) everywhere who are sometimes recipients of promo discs from public relations firms or record companies themselves. Sometimes I get multiple copies of one album and find myself asking whether I would get in trouble for selling them online, so I end up just giving the extras away to good friends or family.
Now, I (and scores of others) don’t have to worry about reselling promo CDs online or anywhere else, for that matter, because of this federal ruling. Score it a big win for music consumers everywhere!Powered by Sidelines