ReDigi: The Thrift Shop for Digital Music

By: Jason McMullen

In 2011 a company named ReDigi launched an online market place to sell used digital music.[1] The aim was to create a cloud-based market place in which individuals could re-sell their used iTunes music.[2] As support for their business model the company claimed they were protected under the Copyright Act’s “first-sale” doctrine.[3] This concept quickly caught the attention of the record industry that felt their copyrights were being violated and subsequently led to a 2013 lawsuit.[4]

Capitol Records, LLC v. ReDigi, Inc. centered on the issue of whether the “first-sale” doctrine could be applied to digital music.[5] The “first-sale” doctrine gives consumers the right to sell, display, or otherwise dispose of legally purchased copies of copyright work.[6] For example, if a user purchases a CD containing music, they may sell the CD to a thrift store without consulting the copyright holder. However, the doctrine does not allow the consumer to reproduce, create derivatives, or publicly perform the copyright work.[7] ReDigi claimed they met these standards by creating a cloud-based software where an individual could upload legally purchased music, then have their computer scanned for copies, and once cleared the original file could be purchased and transferred to another user.[8] This ensured no duplicates were made and the “re-sell” was of the original file, meeting the redistribution requirement and avoiding reproduction.[9]

The court did not agree with ReDigi, instead finding they violated Capitol Records copyrights and thus ending use of the “first-sale” doctrine in a digital marketplace.[10] The court reasoned the “first-sale” doctrine only applied to material objects finding support in both the plain meaning and legislative history of the “first-sale” doctrine.[11] Since the “first-sale” doctrine only applies to material objects the court concluded it could not protect Redigi because digital files are not material objects.[12] Further since digital files are not material, by sending a file from one computer to another a copy must be made thus violating copyright owners right to reproduction.[13] Lastly, the court refuted Redigi’s claim that its reading of the “first-sale” doctrine would exclude digital works, by stating an owner still maintains the right to sell a complete iPod or hard drive full of digital files.[14]

While this case was decided in 2013, the issue has resurfaced on review in the 2nd Circuit Court of Appeals.[15] Even though ReDigi is now bankrupt, the case is still of importance because it centers on whether the “first-sale” doctrine has a role in the digital market. The “first-sale” doctrine is vital to the creation of secondary markets that help to spread works of knowledge and entertainment.[16] Places like bookstores, libraries, garage sales, and flea markets are protected by the “first-sale” doctrine and as the digital world continues to increase secondary markets may not have a role to play.[17] As the 2nd Circuit Judge Pierre Leval noted during the proceedings, this is an issue of great importance that has a “high-likelihood” of continual litigation at the Supreme Court level.[18]


[1] David Kravets, Online Market for Pre-Owned Digital Music Hangs in the Balance, Wired (Feb. 2, 2012, 6:22 PM), https://www.wired.com/2012/02/pre-owned-music-lawsuit/.

[2] Capitol Records, LLC v. ReDigi Inc., 934 F. Supp. 2d 640, 645 (S.D.N.Y. 2013).

[3] Ben Sisario, Site to Resell Music Files Has Critics, N.Y. Times (Nov. 14, 2011), http://www.nytimes.com/2011/11/15/business/media/reselling-of-music-files-is-contested.html?mcubz=0.  

[4] Eriq Gardner, The Legality of Selling “Used” Digital Songs and Movies Headed to Appeals Court, Hollywood Rep. (Apr. 6, 2016, 10:49 AM), http://www.hollywoodreporter.com/thr-esq/legality-selling-used-digital-songs-881362.

[5] See Capitol Records, 934 F. Supp. at 648.

[6] 17 U.S.C.S. § 106 (2017).

[7] Id. at § 109.

[8] See Capitol Records, 934 F. Supp. at 645.

[9] Id.

[10] Kristen Iglesias, Capitol Records, LLC v. Redigi Inc. and the Future of Digital Resale, N.Y.U. J. of Intell. Prop. & Ent. L.: JIPEL Blog 2016-2017 (Mar. 15, 2017), http://blog.jipel.law.nyu.edu/2017/03/capitol-records-llc-v-redigi-inc-and-the-future-of-digital-resale/.

[11] See Capitol Records, 934 F. Supp. at 648-49.

[12] Id. at 649-50.

[13] Id.

[14] Id. at 656.

[15] Eriq Gardner, Appeals Court Grapples With Digital Files, and the Business of Selling “Used” Songs, Hollywood Rep. (Aug. 22, 2017, 12:58 PM), http://www.hollywoodreporter.com/thr-esq/appeals-court-grapples-digital-files-business-selling-used-songs-1031629.

[16] Brief of Copyright Law Scholars as Amici Curiae in Support of Defendants-Appellants and Reversal, Capitol Records, LLC. v. ReDigi, Inc., No. 16-2321 (2d. Cir. Jul. 1, 2016), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2921890.

[17] Id.

[18] Gardner, supra note 15.

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