The Right To Resell: A Ticking Timebomb Over Digital Goods


There’s a brewing conflict over consumers’ rights to use platforms like ReDigi to resell their books, music and other digital property. Now libraries and companies like eBay and Redbox are leading a campaign to pass “You bought it, you own it” laws.
Timebombphoto: DVARG

It’s easy to borrow a book from the library, rent a DVD or sell CDs to a local record store. Why, then, is it so hard to do the same when this content is in digital form? One reason is that laws that govern how we sell our stuff aren’t very compatible with digital content. As awareness of these issues builds, a war is brewing – with retailers and publishers on one side, and libraries, consumers, and startups on the other.

When you purchase a digital music track, e-book, digital movie or other type of downloaded content, you aren’t actually buying it, as you would a printed book or CD. Instead, you’re licensing it, in the same way that you license software. This means that you get rights to that content that the publisher defines in a license agreement, instead of those granted to you by copyright law.

Digital content licenses typically give users the right to play or read the content. But what if you want to sell, lend, or give away your digital files? Under U.S. copyright law, you’re allowed to do this for physical media products, thanks to a concept called the First Sale doctrine. First Sale says that the publisher has no control over what you do with a media product once you buy it. Used bookstores, video rental stores, and libraries all owe their existence to First Sale.

Yet current U.S. legal convention dictates that in most cases, First Sale doesn’t apply to digital files. Very few publishers or retailers give you the right to transfer your files to others. As a practical matter, “Digital First Sale” would mean that you could transfer ownership of your files to others legally as long as you delete your own copies – including backups, copies in cloud storage, and so on. This implies one of two things: either you are trusted to delete their copies, or there must be a robust, legally mandated mechanism that does it automatically.

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Discussion2 Comments

  1. No, Bill Rosenblatt. Incorrect. When I download a song from iTunes, I’m not downloading a ‘license’. I’m downloading a product–a music file–and it’s stored on my computer. Same as if I were to buy a hard copy of a book, CD, or DVD, and store it on a shelf in my home. I bought it, I possess it, it’s mine, permanently.

    Your description of a music file as a ‘license’ is the made-up argument that music labels are using to fight ReDigi, whose concept is completely legal, in a very simple way that any layman can understand:

    People can photocopy books now, and burn CD’s and DVD’s, and then sell their original copies at used bookstores, and used CD and DVD stores. Yet these stores are still allowed to exist. They’re allowed to exist because of the First Sale Doctrine.

    ReDigi is going to win this case, and soon after consumers are going to be able to sell and buy used digital content over the internet. Music labels, publishers and media companies aren’t going to be able to do anything about it.

    It’s going to suck for the companies, they’re all going to have to adjust their finances, but they’ll adjust.

    If they don’t want to adjust, media companies will have to change the US constitution and adjust the language of the First Sale Doctrine.

    The solution is simple, too. Media companies need to make their products available for rentals, by streaming or library-like loan-outs. If I want to read a book but I don’t want to buy it, I can buy a week-long license from the publisher, read the book on my iPad, and after seven days the license expires and I’m no longer able to read the book. Same for music, movies and TV shows.

    If people want to own the content, they can purchase it for a higher price. And re-sell it over ReDigi, or through a cooperating company that sets pricing disparities between content for sale and for rent.

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