After Six Years and Two Court Defeats, ‘Used MP3’ Service ReDigi Appeals to the Supreme Court

Despite its best efforts, the Supreme Court may ultimately overlook ReDigi’s desperate last-minute appeal against Capitol Records.

Let’s face it.  ReDigi never had a viable business model to start with.

Founded in 2011, users on the online marketplace could buy and sell ‘verified’ used MP3s.  Once subscribed, users could download and install the ReDigi marketplace application.

Unfortunately, the music industry didn’t agree with the company’s business model.  So, taking the online marketplace to court in 2013, Capitol Records claimed ReDigi willfully facilitated and profited from the sale of copyright commercial recordings.  This, argued the record label, would have a detrimental impact on the MP3 market.

The US District Court agreed.  Six years ago, Judge Richard Sullivan sided with Capitol.

The logic?  You could sell your CD collection.  You can even open a used CD store on the corner or online.  But, according to Sullivan, you can’t resell your MP3s, nor can you operate a service that allows it.  It didn’t matter that ReDigi deleted the original MP3 once a sale finalized.

“It’s beside the point that the original phonorecord no longer exists.  It matters only that a new phonorecord has been created.”

Now, after six long, arduous years, the online marketplace has returned to court.  This time, ready to take Capitol Records all the way to the highest court in the US.

The business model that ReDigi refuses to abandon.

In a letter filed at the Supreme Court, the online marketplace has challenged a Second Circuit ruling handed down last year.

The appeals court had sided with Judge Richard Sullivan, effectively shutting down the company.  The service, despite what the company had argued, wasn’t covered by the ‘first-sale’ doctrine.  This rule applies to the resale of books, albums, and other physical copies of copyrighted works.

ReDigi’s letter, addressed to Justice Ruth Bader Ginsburg, has asked for an extension for the Supreme Court filing, citing a scheduling conflict.

The Petition raises novel and important legal questions about copyright law.

This, writes the online marketplace, includes whether “a person who lawfully acquires a digital file through the Internet has the right to resell it.”  The company has once again cited the first-sale doctrine to defend its unviable business model.

If granted, ReDigi will have until May 11th to appeal to the Supreme Court.

Defeating the company’s appeal last December, US Circuit Judge Pierre wrote on behalf of the three-judge panel,

None of [the company’s] arguments negate the crucial fact that each transfer of a digital music file to ReDigi’s server and each new purchaser’s download of a digital music file to his device creates new phonorecords.

In an amicus brief filed two years ago, the Association of American Publishers urged the Second Circuit to uphold Judge Sullivan’s decision.  Legalizing services like ReDigi, claimed the association, would remain “catastrophic for the entire publishing industry.”  This could enable a secondary market where people could sell cheaper, but indistinguishable, ‘used’ e-books, the publishing industry’s primary market.

Speaking with Publishers Weekly, multiple lawyers have claimed that the Supreme Court will likely not consider the case.  They noted the lack of a circuit court split.



One Response

  1. Dave Kaspersin

    But, Spotify gets away with only paying Artists Six Cents per 100 Streams !