[JPL] Law Suit about sale of CDs

TomtheJazzman tomthejazzman at embarqmail.com
Tue Apr 15 15:26:34 EDT 2008

  /Courtroom Showdown For EBay Seller Over Promo CD Sales/

The Electronic Frontier Foundation (EFF) and San Francisco law firm 
Keker & Van Nest filed briefs in federal court Monday on behalf of eBay 
seller Troy Augusto, defending his right to resell promotional CDs 
("promo" CDs) that he buys from secondhand stores in the Los Angeles area.

Augusto, who does business as "Roast Beast Music" on eBay, was sued in 
May 2007 by Universal Music Group (UMG), the largest record company in 
the world, for 26 eBay auction listings involving UMG promo CDs. At 
issue is whether the "promotional use only, not for resale" labels on 
these CDs can trump a consumer's right to resell copyrighted materials 
that they own, guaranteed by copyright law's "first sale" doctrine.

For decades, major labels have distributed promo CDs for free to 
tastemakers and music industry insiders in an effort to create buzz for 
upcoming releases. These promo CDs often make their way into secondhand 
stores, where Augusto purchases them for resale on eBay. UMG stamps its 
promo CDs with labels declaring that the CDs may not be resold and 
remain the property of UMG. The "first sale" doctrine in copyright law, 
however, makes it clear that once the copyright owner sells or gives 
away a CD, DVD, or book, the recipient is entitled to resell it without 
needing further permission. The summary judgment brief filed Monday 
argues that UMG gives up ownership of these promo CDs when it mails them 
unsolicited to thousands of people without any intention of their 
return. Accordingly, the first sale doctrine permits purchasers to 
resell these CDs.

"If UMG is able to stop resale of CDs just by putting 'not for resale' 
labels on them, then there is nothing to stop other restrictive labels 
from appearing on CDs, books, and DVDs," said EFF Senior Intellectual 
Property Attorney Fred von Lohmann. "Record companies are not entitled 
to strip consumers of their first sale rights simply by putting labels 
on their products."

A hearing on the motion for summary judgment is expected in early May 2008.

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