Schrödinger's Download: Whether Or Not An iTunes Music Sale Is A 'Sale' Depends On Who's Suing
from the that-cat-is-dead dept
Steve Worona has a great post pointing out how the record labels have clear cognitive dissonance (the ability to hold two totally conflicting ideas in your head at the same time -- and argue for both of them) when it comes to the question of whether or not an iTunes purchase represents a "sale." He puts forth three examples of such cognitive dissonance in the legal context, with the final one being taken from two recent legal cases involving major record labels:What's being discussed here, of course, are two cases that we've covered. The Eminem case involved whether or not an iTunes purchase counted as a "sale" like a CD, where there was a very low royalty rate (probably around 15%), or as a "license" like for a movie, where the royalty rate was more like 50%. Universal argued stringently, and continues to argue in a series of follow-up cases, that an iTunes purchase is just like a CD purchase, and the much lower rates apply. However, in the ReDigi case -- where the company is trying to argue that if an iTunes purchase is just like a sale, then clearly the "first sale doctrine" applies and those files can be resold -- EMI, which is in the process of being acquired by Universal, argues that an iTunes sale is a license, and thus there's no first sale.Example 1, the case of the kettle. As summarized by the Manhattan Institute for Policy Research, “Readers who’ve been to law school may remember the chestnut known as the ‘Case of the Kettle’. A man is charged with borrowing a kettle and breaking it. His reply is that, first, he never borrowed it; second, it was already broken when he borrowed it; third, it was intact when he returned it.”
Example 2, the case of the dog. Paraphrasing from a 1978 Wall Street Journal article about well-known Texas defense attorney Richard “Racehorse” Haynes: You say my dog bit you, but I don’t own a dog, and he doesn’t bite, and you kicked him first.
Example 3, digital downloads. Two recent court cases hinge on how the sale of an MP3 download compares to the sale of a conventional physical recording, known as a “phonorecord” in Copyright-speak. In one case, the singer Eminem demanded that Universal Music Group calculate his royalties for downloads based on the higher rate for licensed material instead of the lower rate for phonorecord sales. UMG refused, arguing that the sale of an MP3 download was the same as a phonorecord sale. In the second case, EMI filed suit against ReDigi, a company that allows purchasers of MP3 downloads to resell those files under Copyright law’s “first sale” doctrine. EMI argued that the MP3 files were not phonorecords and thus not subject to first sale.
Worona sums it up beautifully:
Putting these two arguments together, we see the music industry imagining transactions where what’s sold is a phonorecord but what’s purchased isn’t.To me this seems like the Schrödinger's Cat of copyright law. According to the record labels, if we're talking about it from the seller's perspective, it's a sale. But the second you flip the equation and look at it from the buyer's perspective, it's a license. The cat is simultaneously dead and alive. Either the major labels are full of it... or they're breaking new ground in quantum physics. I'll assume it's the former, rather than the latter.
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Filed Under: cognitive dissonance, downloads, licenses, sales
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"it"
Given these facts, the media industry should also be aware, that we're on to them. We see their hypocrisy for what it is and we are starting to bypass them to fund the artists directly wherever possible. Say hi to the dinosaurs when you get to your final destination.
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Digital sales is licencing:
Pay Eminem his 50% licencing fee and not allow digital reselling since it is just like licencing.
Digital sales is a sale:
Pay Eminem his 15% sales fee and allow digital reselling since 1st sale doctrine applies.
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Screw the artist and screw the customer at the same time. This would be completely consistent with past behavior.
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Wonderful when you can have your cake and eat it too. Over and over again.
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There's a word for this.
cf. "War is Peace, Freedom is Slavery, Ignorance is Strength"
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Katy Perry said it best
I get the feeling with the MPAA and RIAA, if they tell you it is raining you better look outside and see for yourself.
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Re: Katy Perry said it best
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Of course
1. Copyright law's purpose is to ensure a steady income stream to the record labels
2. "Sales" are better when it's the record label doing the selling
3. "Licenses" are better when that's what the purchaser purchases
The only way these can all be true if the record label sells it to you, but you license it to them. So clearly that must be what happens.
Was that so hard ?
On a serious note, I'd love to see their opponents in the two cases bring the record label's lawyers in the other case to the stand...
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Re: Of course
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Re: Of course
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Re: Of course
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This isn't just a Big Media thing though
So of course these labels argue both ways.
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First sale rights may be dead in a digital world. Licensing can (and does) restrict resale by making the license non-transferable.
Taking it further, if it is a license (and Eminem has proven this in court), then obtaining the material without a license would be a form of fraud. Oh, oh! You guys aren't just playing the copyright law game anymore, now you are into contract law and such. Nasty!
Welcome to your worst nightmare - a valid way under existing laws to go after pirating sites legally, without having to prove copyright. Nice!
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I know, I know, reading is hard.
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See how that works? You have to actually weigh the information.
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To make a binding decision wouldn't all of this have to go to your Supreme court anyway or at least to appellate courts if the Supreme knocks back hearing under cert?
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Then why are you criticising an article detailing the claims rather than the ruling for doing just that?
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Why is this our worst nightmare? I, for one, would much prefer that this be the way they go about it. Then we can more easily move ahead with fixing copyright law so it stops harming society.
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If you have it without a license, it is illegal. POINT.
It's an argument that the pirate folks just can't counter.
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which contract are they violating?
at least, using your logic, they won't find themselves in criminal court
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Pshaw. You'd know that if you ever read the contract, you damned-dirty-fatboy-masnicing-freetarded grifter!
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I meant "-masnicking-"
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Masnicking: the act of being a damned-dirty-fatboy-freetarded grifter
Masnicing: the art the art of making a sandwich so exquisitely perfect and delicious that nearby babies cease to cry, small dogs stop yapping, and a nearby Lamar Smith or Chris Dodd will actually get a momentary glimpse of reality. Side effects known to include transcendence to a higher plane of existence, a realization that mint chocolate chip is the most superior of all ice cream flavors, and possibly being nominated for GQ's sexiest man of the year (Applies to female masnicers just the same).
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Trying to rely on contract law instead of copyright law is only going to hurt your cause. In that case, in addition to it not being illegal to have a copy, you would also lose the criminal trials against pirates, as I've never heard of a criminal violation of contract law.
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"It's an argument that the pirate folks just can't counter."
Chosen Reject (profile), Feb 10th, 2012 @ 1:26pm Just handed you your ass with a smile. Where are you at now?
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There is no confusion on this point. Copyright violation (piracy) is already clearly illegal. And even so, I fail to see how making things very clear is a "nightmare".
"If a party has the right to license, and all sales are licenses, all pirated copies are illegal by definition"
Actually, no. All pirated copies would be evidence that someone violated the licensing agreement, true. But those copies would not be "illegal" in the sense that the person in possession of them is doing anything that is in violation of the law.
If I get a pirated copy of something from a licensee, the licensee violated the license agreement, but I didn't, as I never entered into such a contractual relationship. I am not in violation of anything.
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If you say in court "you don't have a license for that file", the first thing you're going to asked for is to prove that you hold the copyright, otherwise you don't have a case.
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If you commit a crime (illegal act) under Contract law it could maybe void the contract, though that would be up to the parties to decide or a civil court dependent on the terms within that contract,
If a contract has been created for the specific purpose of committing an illegal (criminal) act then the contract is by default voided.
If you acquire something and you don't have the license to go with it does not make it an illegal act, and it doesn't even make it a forfeiture of contract since you were never a party to the contract in the beginning (no acceptance nor offer). The ONLY thing you might be up for is a civil copyright breach though their are numerous lawful reasons why you wouldn't be.
Next time, learn about the torts & laws before you type.
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- Fraud
How is obtaining material without a license an intentional deception?
Sounds like good old copyright infringement to me. Also, contract law is irrelevant if you're not a party to the contract.
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Only after a proven infringement could contract law come up, as there is no proof that the contract has been violated without both proof of infringement and proof that the party in question agreed to a contract forbidding infringement.
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Since they're not, it's just two different entities taking two different positions, unless you everyone who owns sound recording copyrights as some monolithic "recording industry."
Moreover, the EMI position is supported by the prior UMG/Eminem decision.
It's like saying Techdirt said Y, but the Washington Post said not Y. Therefor the online writing industry is contradicting itself.
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My critism isn't your observation that UMG and EMI are different companies, but your analogy does not capture how closely involved the two companies are.
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Right?
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Philosophically and linguistically, two different and even opposing statements can both be true, if they are evaluated in different contexts. This can and does often cause cognitive dissonance in the feeble-minded, but that is not relevant to the state of mind of RIAA lawyers.
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They are a license and a sale...
The royalty rate is based on the sale (or license) to the retailer (e.g. iTunes). They claim that this is a sale, but it's clearly not. They deliver a single master copy to iTunes who reproduce it on demand for their customers.
But the consumer, however, just downloads a single copy without the same right to duplicate that iTunes had. This looks a lot more like a sale.
Maybe the consumer is just a licensee as well. I think not, but that can at least be reasonably debated. But IF the label is "selling" to iTunes, then there's no way that the consumer is doing anything but buying that same object from iTunes.
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Re: They are a license and a sale...
EMI sells iTunes a CD with the permissions to sell licensed copies of it to me. THIS is how it can be both a license and a sale and really isn't no different than Ford selling a car to Avis and then Avis renting it to me.
Of course, the difference is that all parties understand that renting the car is *renting* and is temporary, but digital downloads are not thought of that way by consumers.
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Re: Re: They are a license and a sale...
However, you CAN dictate terms for use in a license.
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Ex-Wife Logic?
"What's mine is mine, what's yours is mine and everything you earn from now until the end of time is also mine."
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Re: Ex-Wife Logic?
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I hate to be that guy but...
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Re: I hate to be that guy but...
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We already know that they discovered a new law of physics
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2. Then it's a sale.
3. You got a license.
Makes perfect sense.
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The cat should make up its mind already. Personally, I hope to open the box one day and see a rotting corpse.
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There's a lot of "they" in these scenarios. Who is they?
I don't buy my music from the major labels. I buy it from Google Music. Can it be a "sale" from the label to Google and then a license from Google to me with some of the license terms being dictated via contract between Google and the label?
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If a consumer "purchases" a license, then the "sale" was of a license.
If the consumer "buys" a license, then the artist gets a much higher royalty.
If the "sale" is for a license, then violating that license is a civil matter, at least under current law.
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It is the transaction that the consumer is making.
The music labels want a SINGLE TRANSACTION (the consumer paying to legally acquire the music) to be a license when determining the consumer's rights, and a sale when determining the artist's rights.
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The whole sale/licensing/purchase/rental thing is just such a horrible mess, I feel like I should be consulting with my attorney before I make my next $0.99 music purchase. :)
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That’s Not “Cognitive Dissonance”, that’s “Doublethink”
The term you’re looking for—being able to hold multiple conflicting beliefs simultaneously, and not think twice about it—was described in George Orwell’s 1984 as “doublethink”.
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Re: That’s Not “Cognitive Dissonance”, that’s “Doublethink”
Don't the **AA's do that all the time in regards to piracy? :-)
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Re: That’s Not “Cognitive Dissonance”, that’s “Doublethink”
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Well
Why not set up your OWN re-selling business selling eminem songs.
This way, you have TWO lawsuits running concurrently and can safely and legally use the evidence from each to show how the record labels are and hate artists and just want to steal as much as they can from them.
Then, since eminem is still popular he could write a song about how to screw over the record labels by buying direct from the artist.....
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Re: Well
Why not set up your OWN re-selling business selling eminem songs.
His contract probably prohibits him from doing that.
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SMH
Think about it. The label invested and got that investment back and now gets 50% of the revenue for doing absolutely NOTHING. They have no costs associated with the digital sales. Everything they get is pure profit. How do they react? "But but but... that's not enough, we are a label."
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Re: SMH
That seems to apply equally to major labels. But they aren't in handcuffs?
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shroedinger's cat and music
As an attorney, I believe the legal system needs to be fixed. The underlying thinking even seeps into the IP system, and the results are always bad; encouraging deceit.
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Looking for elementary music particles
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Re: Looking for elementary music particles
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The RIAA is an oxymoron...
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Malformed RSS feed (because of this article's title)
...Anyway, if you could change that "ö" into an "o", it'd fix everything (same as last time). Thanks in advance!
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