UMG extends copyright war to the trash can

Next time your favorite DJ tosses a promo CD from a UMG artist into the trash, he or she should be reminded that the music industry behemoth considers such disposal an "unauthorized distribution" that's tantamount to piracy.

This little nugget from the front lines of the copyright wars comes courtesy of Fred von Lohmann, an intellectual property attorney with the Electronic Frontier Foundation. Von Lohmann dug it out of the latest brief filed by UMG in an ongoing legal tussle between that company and Troy Augusto, proprietor of Roast Beast Music Collectibles on eBay.

As disputes involving the music industry and intellectual property rights go, this one appears on the surface to be trivial. In a nutshell: Augusto buys up promo CDs from the music insiders who get them free. UMG says he can't do this because it says he can't right on a label carried by all promo CDs. EFF says UMG is wrong because the possessors of the CDs have a "first sale right" to sell the discs, and it has been advocating Augusto's case.

Why should anyone other than UMG, Augusto, and would-be participants in the presumably burgeoning promo CD marketplace give a hoot?

I sent von Lohmann a few questions. Here's our exchange:

What's really at stake in this issue (aside from the financial interests of the principals)? Is it your concern that a UMG victory on the promo CD matter could lead to an erosion of consumer rights in other areas?

Exactly. If UMG can trump your first sale rights with a simple label, there is nothing to prevent book publishers from imposing "licensed for personal use, not for library lending" labels, or movie studios from adding "licensed for personal use, not for rental" labels, or laser printer cartridge vendors adding "licensed for single use only, not to be refilled" labels (that last one has already happened, in the patent context). Similar labels could be used to trump all of the rights that consumers enjoy under copyright law, including fair use.

It seems to my layman's reading of the briefs that the issue boils down to a distinction between "possession" and "ownership" of the promo CD, with UMG contending that the former does not constitute the latter here because it says so on the label. You're saying it does because UMG cannot transfer possession without ownership simply by stating that intent on the label. Is that an accurate reading?

What we're saying is that UMG, by its conduct, has clearly given up ownership here. They mail out millions of CDs, unsolicited, without any intention of their return, without even bothering to keep records of who has them, and then claim that these are just "loans" and that UMG continues to own every one. In the face of that conduct, the law shouldn't allow a simple label to prop up UMG's fiction of ownership.

Would your position be altered if UMG's promo CD distribution channel was more formal and specific, meaning the CDs were sent only to those recipients who affirmatively agreed to abide by the terms before receipt?

Yes, if UMG had actually treated these CDs as if they owned them, then the answer might be different. For example, everyone agrees that the first sale doctrine doesn't apply where a copy is rented. So if UMG wanted to enter into contracts with recipients before sending these CDs, and made a point of ensuring their return after a period of time (you could imagine each recipient getting a postage-paid envelope at the end of the year, saying "please return the CDs we sent you -- if you would like to keep some, we'll bill you"). The point here is not just creating overhead for UMG -- this is what prevents the first sale doctrine from turning into a dead letter in a world full of "label notices."

Finally, on the matter of "disposal equaling piracy": Is that just to protect against the "I found it in the trash and therefore can sell it" defense? If not, what do you believe their point is there?

To UMG's credit, it's good to see them owning up to the consequence that, if you accept their story of "eternal ownership," then any unauthorized disposition would implicated the distribution right. So I think they are just following the logic where it necessarily leads.

You can read UMG's 25-page rebuttal here, and find the section about unauthorized disposal on Page 12 of the .pdf.

I'm certain that station managers all across the country will be bringing it to the attention of their employees ... including the janitors.

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