Judge rejects music industry's promo CD copyright claim

In a major pushback against music industry efforts to expand copyright control at the expense of consumers, a California judge has ruled that recipients of promotional CDs are free to do with them as they please. In other words, what would seem obvious to the layman, in this case also happens to be the law.

However, during a long-running legal battle that shut down an eBay seller, Universal Music Group had argued that it retained licensing rights and could prohibit such resale despite the fact that its promo CDs are distributed willy-nilly to thousands of music industry insiders who neither ask for them nor are not expected to return them.

Tuesday's ruling by U.S. District Court Judge S. James Otero is meaningful not merely because it protects an income stream for CD resellers, says the Electronic Frontier Foundation, but primarily because it affirms the so-called "first sale" doctrine. From the EFF's press release:

"This is a very important ruling for consumers, and not just those who buy or sell used CDs," said EFF Staff Attorney Corynne McSherry. "The right of first sale also protects libraries, used bookstores, and businesses that rent movies and videogames. This ruling affirms and protects the traditional balance between the rights of copyright owners and the rights of the public."

"It was clear to the court that these CDs were the property of (the eBay merchant), and therefore he had the right to resell them," said Joseph C. Gratz, attorney with Keker & Van Nest. "Copyright holders can't strip consumers of their first sale rights just by sticking a 'Not for Sale' label on a CD."

The bottom line from the judge:

"The promo CDs are unordered merchandise," Otero writes in his order (PDF). " ... By sending the promo CDs to music industry insiders, UMG transferred title to those insiders and the promo CDs are subject to the First Sale Doctrine."

When I first wrote about this issue two months ago, EFF intellectual property attorney Fred von Lohmann answered a number of questions regarding the nitty-gritty of the case in an interview you can read here.

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