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SDNY Court Says Music Downloads Cannot Be Resold

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It is a common problem we all face at some point. You stumble across a song or album in your music library and think, "Why did I buy this? There is no way I will ever listen to this again." If the music is in a physical format, such as a CD or vinyl record, the solution is very simple: take it to your local resale shop and walk away with a little extra cash in your pocket.

This practice is legal thanks to the first-sale doctrine, which was established by the Supreme Court in 1908 in Bobbs-Merrill Co. v. Straus and codified in the Copyright Act of 1976. The first-sale doctrine allows a person who has obtained a copyrighted work, such as a CD, by legitimate means to dispose of the copyrighted work. This happens every day at your local book, music, and movie resale shops.

But what happens if you want to get rid of a digital copy of that embarrassing pop album? You can simply delete it, but that seems like a waste. Why not resell it? Isn't it just like a CD? A Southern District of New York court provided the answer this week in Capitol Records v Redigi: No, at least not in the manner Redigi provided to users.

Redigi lost its most recent appeal after being accused of copyright infringement by Capitol Records. Redigi allows users to sell strictly digital music to others on the internet. While the startup tries to keep traders honest by forcing them delete originals after a resale, the process, because of its digital nature, still involves making a copy of the track without Capitol's permission, according to the court. There is no indication what damages Redigi may have to pay, but there is enough legal precedent in the case that it is doubtful others will follow in Redigi's footsteps.

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Privacy Claims Based on Facebook Firing Rejected by Texas Court

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This case involved Emergency Medical Technicians who were fired for making intemperate statements on Facebook. (One EMT said she wanted to “slap” a patient; the other concurred with another EMT's statements that restraints were appropriate.) The EMT's appeal involved his intrusion of seclusion claim based on the fact that his co-workers and bosses saw his comment to the other EMT’s post. The EMT lost, and his “I didn’t understand Facebook settings" argument is kicked to the curb.

You should assume everything you post to an electronic network is public and might some day resurface. Because it is as a practical matter, and courts will treat it as such. The EMT was even warned that “the public sees [her] posts,” but she nevertheless continued her rant.

The NLRB recently issued one of its first decisions on Facebook firings and the effect of an employer’s policy. Here’s the NLRB’s release: “NLRB finds Facebook posting that caused salesman’s discharge at Chicago-area BMW dealership was not protected.” The NLRB case involved an employee at an auto dealership who was terminated for Facebook posts. The NLRB took the auto dealer-employer to task for an overly broad policy (with a dissenting opinion). Interestingly, the board found that one of the posts—that complained about the quality of food at a customer event—was protected, but a different post actually precipitated the firing.

Roberts v. Careflite, 2012 Tex. App. LEXIS 8371 (Tex. Ct. App.; Oct. 4, 2012)

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After 5 years in court, end of the line for the Download Martyr

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Today, the Eighth Circuit upheld a jury verdict awarding statutory damages to a group of major record labels in the file-sharing case of Capitol v. Thomas-Rasset. The defendant in the case, Thomas-Rasset, became the face of those who the RIAA pursued through litigation and was given the nickname, "the Download Martyr." The companies Thomas-Rassett fought include Capitol Records, Sony BMG Music Entertainment, InterscopeRecords, and Warner Bros. Records, among others.

The original trial dates back to 2007. It began after music companies accused Thomas-Rasset of willfull infringement of 24 songs by posting them on the former file sharing site Kazaa. After the initial trial, the court raised the issue of whether jury instructions where in error when they stated that “making available” a work online was sufficient to show distribution, or whether evidence of actual distribution to another person must be proven. The court granted a new trial, which resulted in a jury verdict of $1,920,000 against Thomas-Rasset. The judge lowered the jury award to $54,000. The record labels rejected this, and a third trial, solely on the amount of damages, was held in late 2010. The jury entered a much higher verdict of $1,500,000 against Thomas-Rasset, which the judge subsequently reduced the award to $54,000 on constitutional grounds. The most recent trial is the result of appeals by both parties.

The most interesting issue to come out of this case deals with the ruling on the "making avaliable" issue. District courts are divided on whether "making avaliable" amounts to distribution. It becomes difficult for plaintiffs, here the copyright holders, to prove that a particular person actually passed the particular file along to another user. The music companies wanted the court to equate distrubution with a broad definition of "making avaliable," thus making it easier to find damages against file sharers. The court, however, kept silent and declined to review the “making available” issue.

Although Thomas-Rasset's attorneys have indicated they will appeal to the Supreme Court, it is unlikely she will convince them to review her case.

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