Court Rules That Selling Promo CDs Is Perfectly Legal

from the huge-win dept

Wed, Jun 11th 2008 1:12pm — Mike Masnick

There was a big win for copyright and the concept of the first sale doctrine today, as a court has ruled that record labels cannot stop the sale of a promo CD just because it's stamped with a message that says "not for resale." We had discussed this case last summer, when it was first filed. Universal Music was trying to prevent a guy selling promo CDs on eBay. He had bought them at various music stores. Universal claimed that because the CDs were stamped with that "not for resale" message, they really retained ownership of those CDs and no one could sell them. This would go against the very concept of the first sale doctrine, and, thankfully the court agreed, trashing Universal's weak claim that just by writing a note on any piece of content, it could ignore copyright law and retain ownership of the good forever.

This is a big victory, as a loss would mean that content providers could basically create their own copyright rules for any content they sold, potentially limiting it in much greater ways than copyright already does. This ruling, coming right after the Supreme Court's ruling in the Quanta case, about a similar issue involving patents, hopefully will block companies from trying to pretend they get to retain total control over goods even after they're sold.

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Filed Under: copyright, first sale, promo cds, used cds
Companies: universal music

16 Comments

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Freedom, 11 Jun 2008 @ 1:26pm

Licensee Transfer??
How does this ruling effect license transfers?

For instance, if X company buys software and in the license agreement or EULA it says that the license can't be transfered does it hold up?

I've seen instances where a company buys software in their name, doesn't need it any longer, resells it to another company. At this point, the software company refuses to recognize the 2nd company involved and considers that they are using pirated software...

Freedom
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sonofdot, 11 Jun 2008 @ 1:39pm

Re: Licensee Transfer??
This ruling has no effect on EULAs, unless you received the software unsolicited in the mail. In that case, you can do whatever you want with it, because it's considered a gift.

The concept of software being licensed rather than sold is a completely different subject.
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Ima Fish, 11 Jun 2008 @ 1:40pm

But unfortunately they are still killing the first-sale doctrine by making it nearly impossible to sell used CDs in some states.
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N1ck0, 11 Jun 2008 @ 1:53pm

Re: Licensee Transfer??
Licenses are still a bit different then a sale, although its still being debated if EULAs are technically legal.

The issue with CDs is that physical media was treated as property. This gives the owner/consumer more rights: first-sale, modify the media, etc. Because once you own it you pretty much can do what you please with it (except for violate other laws by redistributing, violating copyright, trademark, etc). You could basically buy CDs and use them resell them as wall art if you wish.

But recently the media companies want to say 'no we didn't want to sell you that cd; we really just licensed it to you. Its really still our property'. In that case you loose those consumer rights because its not actually yours. But if you license are getting a license to listen to the song, your supposed to be able to exercise that license no matter what the format the media is in.

So whenever people try to claim rights as an owner they claim to be licensing it. Whenever people try to claim licensee rights they claim to have sold property. They basically want to retain rights from both without the negative.
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sehlat, 11 Jun 2008 @ 1:56pm

They'll still try to pretend...
Remember, the old latin motto "Caveat emptor" (Let the buyer beware). The modern corptocracy has modified it into "Carpe emptor" (Seize the buyer).
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me, 11 Jun 2008 @ 2:25pm

coool!
So, Sony/BMG will not come after me if I sell my 1901 Victor Gramophone Pre-Nipper Collins and Harlan 78rpm piece of vulcanized rubber...ya know the one with the paragraphs of EULA all over the front label and on the back sticker..
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Matt, 11 Jun 2008 @ 2:30pm

driving people away
This whole thing drives me completely up a wall.... IF I go out and buy....say a lawn mower.... And i use it for a couple years, don't need it any more, and want to sell it, Craftsman SHOULD NOT be allowed to come in and say... "You can't sell that, see it says on the label "Not for Resale"" That is completely NUTS and this is what these people are doing! I feel the same way when it comes to Digital Music... I Bought that copy of the song WHY can't i take it and resell it at a price that i think is fair? I'll be honest, I Normally download my music from torrents, But if i like the song or album a lot, I go and i buy it off of ITunes as well. The whole situation gives me a migrane!
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Anonymous Coward, 11 Jun 2008 @ 3:43pm

Re: driving people away
This whole thing drives me completely up a wall.... IF I go out and buy....say a lawn mower.... And i use it for a couple years, don't need it any more, and want to sell it, Craftsman SHOULD NOT be allowed to come in and say... "You can't sell that, see it says on the label "Not for Resale"
Why not? It's got the owner's on it. See, right there, where it says "Sears Craftsman"?
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ehrichweiss, 11 Jun 2008 @ 5:26pm

Re:
Those laws have nothing to do with the media companies though and more revolves around theft. I've had more than one friend who has owned a CD store and they told me the low down is that it's just about theft and preventing thieves from having an easy place to fence their goods. I don't know about the "gotta wait 30 days" or "only give store credit" that was mentioned in the linked article but the latter sounds like the store's way of getting around limitations in the law but I can't say for sure since I don't live in a state with such strict laws.
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Buzz, 11 Jun 2008 @ 6:21pm

WTF?
This is absurd! If the CD is still "owned" by the producers, what does the money pay for then? It should be 100% free if the customer never owns it.
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Ima Fish, 12 Jun 2008 @ 8:17am

Re: Re:
Actually, these laws are being pushed by the music industry state to state. The music industry has been attempting to shut down used music stores for decades. But the first-sale doctrine has made it impossible. So instead of stopping the sale of used CDs, they're making the sale of used CDs so difficult as to be financially impossible.
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Randy, 12 Jun 2008 @ 10:06am

Great!
Now all those cool remixes cqn bring a dollar or two. Nice!
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Rekrul, 12 Jun 2008 @ 10:23am

Great, some court decided that selling used promo CDs is legal. Now we just have to wait and hope that the next court doesn't reverse this decision during the inevitable appeal.
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Freedom, 12 Jun 2008 @ 12:47pm

Licensee Transfer - Thanks!
For those that responded to the licensee tranfer questions - THANKS! Much Appreciated!

Freedom
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turfkiller, 19 Dec 2008 @ 4:35pm

retail maintenance agreements
Their answer is a recent court decision that once again permits retail maintenance agreements. These have been mostly unenforceable for nearly 100 years. If you sell below a specific retail price, you can be stopped.

On June 28, 2007, the Supreme Court overruled Dr. Miles which was decided in 1911.
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djtweaknine, 6 Jan 2009 @ 4:20pm

what about mixtapes? Any Anwsers?
Does this mean that if I get promos from a record pool.
That I can sell mixtapes?
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