Used MP3 marketplace ReDigi seemed destined to attract legal problems when it launched in October. Now the company has been sued by EMI less than two months after it was sent a cease-and-desist letter from the RIAA. The lawsuit was filed Friday in New York, according to a report at CNET.
The suit centers on the technology and processes that ReDigi uses to create what it calls "the world's one and only online marketplace for used digital media." When an unwanted music file is sold to ReDigi, the file must somehow get from the seller's hard drive to ReDigi's servers. In a conversation with Billboard.biz in October, CEO John Ossenmacher described the process as an instantaneous, simultaneous transaction.
"When our transaction goes from one person to another, there's no copying involved in that transaction," he said.
This is where the two parties have differing opinions. EMI believes copying is indeed involved. EMI's complaint alleges ReDigi makes multiple unauthorized copies in violation of copyright law, according to the report.
But ReDigi is standing by its technology. "It's a meritless case," a spokesperson told Billboard.biz in an email. "We will fight it vigorously."
The resale of physical goods has far less uncertainty. Under the first-sale doctrine (Section 109 of the Copyright Act), copyrighted works can be resold without permission from the copyright owners (a used CD, for example). Ossenmacher told Billboard.biz the company believes the first sale doctrine "absolutely applies" to digital goods.
But this protection give to resellers would not apply in a case where illegal copies of digital files are being sold. "[The first-sale doctrine] does not permit the owner to make another copy, sell the second and destroy the original," the RIAA wrote in its letter to ReDigi.