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Foolishly Fighting First-Sale Rights

Appearing on On The Media, Fred von Lohmann explains Universal’s latest initiative to shut down the festering collectable CD aftermarket.  von Lohmann discusses some interesting cases in the course of the program; here’s the core issue:

Host Bob Garfield: A few months ago, Universal Music Group, the biggest of the four record labels, filed suit in federal court against California resident Troy Augusto. Augusto makes a living buying collectable CDs, mostly rare promotional copies, and then reselling them on eBay. Universal, however, has argued that it still owns those CDs and Augusto isn’t authorized to sell them.

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FvL: [Under the first sale doctrine,] if you buy a CD, you should be allowed to resell that CD or to give that CD away. If Universal here is able to trump the First Sale Doctrine by putting a little label on a product that says “For promotional use only, not for resale,” then I think you’re going to see a lot of copyright owners try to do the same kind of thing. You’re going to see labels that say, “This book not for use in libraries, for personal reading only.” You’re going to see labels on DVDs that say, “This DVD not for video rental, for home use only.”

I suppose we see here a combination theory of 1) using licensing to get around the first-sale doctrine and 2) asserting a reversion of the licensed item to the licensor once the licensee breaks the terms of the original license by offering the item for sale.  Query: what if promo CD is just abandoned?  Can Universal assert the license terms “run with” the CD, ala (what some might expect) a Creative Commons license term would do?

This idea would certainly put libraries on a short leash, as Pat Schroeder apparently hopes:

FvL:  The American Association of Publishers . . . [has] always had an uneasy relationship with libraries because they feel that librarians buy books and then they give them out, loan them for free.  That has led Pat Schroeder, the head of the association, to say that they have, quote, “serious issues with libraries,” unquote. And one of their spokespeople, back in 2001, compared some in the library community to Ruby Ridge and Waco-style terrorists.

Wow, imagine the names they might call the people who are interested in extending access to government-funded medical research. 

Cory Doctorow claims that, rather than putting into place some sensible collective licensing scheme,  “The record industry giants would prefer to go on suing music fans and technology companies — an activity that pays the record companies handsomely, while encouraging fans to defect from buying music in the future, and which does not pay one cent to any artist.”  Though the industry probably feels that analysis is unfair, it does not help its own image with lawsuits like this.