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article imageLegal fight to determine if MP3s can be resold

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By Tim Sandle     Oct 7, 2012 in Technology
Can digital music files like MP3s be resold by the person who downloaded them? This is the question which a U.S. court is set to decide upon this week.
This question has come about after a music company sued an Internet company for selling pre-owned digital music files. The case will be heard in court and the decision, which will have major implications in relation to digital rights, will be determined by a judge.
The court's decision rests on a case between a start-up company called ReDigi and the media conglomerate EMI (owned by Vivendi). As The Register points out, the company ReDigi offers its service as a modern-day equivalent of a used record store, allowing users to sell and buy previously owned MP3 files. ReDigi argues that a digital medium is not significantly different to a physical medium as this type of trade falls within existing copyright laws.
ReDigi's cyber record store only offers MP3 files that were originally downloaded from iTunes. It does not allow tracks to be ripped from CDs and passed along as purchased MP3 files. the company is planning to expand into eBooks.
According to Bloomberg, EMI, however, argues that laws which allow consumers to resell purchased material goods do not apply in the case of digital media. The company considers that ReDigi is guilty of copyright infringement. In EMI's opinion, the selling of digital files is not the same because it is possible to copy a file in a way that a physical product could not be copied (granted a CD can be copied but often it is not the same, in appearance, as the original product).
ReDigi's counter argument is that EMI's distribution rights are limited to material objects, and if digital files are judged to be material objects then ReDigi can draw upon existing 'first sale' legislation, which permits the re-sale of goods.
ReDigi CEO John Ossenmacher, in an interview with Time, defended the company's position by saying: "When someone sells something to someone else on eBay or Amazon, that’s a marketplace transaction. ReDigi is also a marketplace, it just happens to be an all-digital marketplace. So when someone posts something for sale on ReDigi, before it can even get into the ReDigi cloud, we verify its authenticity. The beauty of the digital world is, there’s lots of things you can do that you can’t in traditional storefronts. We do this whole forensic analysis, for instance, designed by a bunch of really smart computer programmers."
EMI is not content with this approach and argues further than although ReDigi claims only to sell music tracks purchased from iTunes, there is little control over this and it is likely, and probable, that tracks will be sold which have been copied from other sources like CDs. EMI also make the point that a company like ReDigi cannot determine if the user has kept a copy of the MP3 that they pass on for sale or not, meaning that customers could simply be selling copies of music.
Quoted by the Fast Company, an extract from EMI's press statement reads: "Most lawful users of music and books have hundreds of dollars of lawfully obtained things on their computers and right now the value of that is zero dollars. ReDigi takes zero dollars and we create billions of dollars in wealth overnight."
EMI is requesting that ReDigi pay a penalty of $150,000 for each song in EMI's catalog that was sold via the service since its launch in October 2011.
The case will be heard at the district court in Manhattan, New York starting on Friday October 12.
The outcome of the case could change the whole approach to file sharing and digital media ownership. The media watch company Strategy Analytics indicates that U.S. digital music sales are set to surpass CD and vinyl sales for the first time ever in 2012.
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