Capitol Records, LLC v. ReDigi, Inc.: No Re-Selling Digital Material

While this case will probably never be considered a landmark case in copyright law, it typifies, for me, the kinds of new issues that arise in IP law as the world changes. It seems that an online store (“ReDigi”) attempted to sell used digital material (e.g., iTunes purchases that the purchaser no longer wanted to hear or see). A judge in the Southern District of New York ruled (last week) that this particular store, ReDigi, was a “clearinghouse for copyright infringement.”

I recently wrote about digital property, mostly with Steam’s store and service in mind. The upshot was that I worry about how much money I can invest into things I don’t “own” (in the sense that we are used to). Let me explain this further: most of the time, when we buy digital property, we actually buy a license to use the property, not the property itself. This is why it is coherent to courts to treat a physical object so differently from a digital one- the legal relationship the “owner” has with each is in a completely different category. This is what raises concerns for me- that my legal relationship with my digital property is different from my ownership over my physical property. Much of my concern is related to my assertion that more and more of our “property” will be digital in the future. As our property interests migrate to a digital world, it is deeply troubling to think that we would have a weaker grasp on our interests in the future.

Of course, the marketplace itself (independent of legal conceptions of ownership or license-ship) determines a great deal of this. After all, it is up to the record companies, development studios and distribution services to choose how to write their Terms of Use agreements. If these decision-makers become convinced that it is in their better economic interest to give a type of ownership that allows resale (and other aspects of physical property ownership) rather than the weaker licensing that many currently sell, the law need not budge on the issue of digital copyright. At least in theory, the law only identifies the correct situation, sorts it into the appropriate category, and applies the prescribed consequences. (The extent to which that is true is a subject of enormous debate, as you can imagine.) If the marketplace writes its contracts of sale in a way amicable to notions of property ownership for a world of digital property, the law need only enforce the appropriate contracts.

There is another sort of law, besides the law of the courthouse and the law of the marketplace, that bears on this subject. That is the law of the programing language itself. Part of the reason ReDigi  was decided to be infringement was that the transfer of the digital property was really a movement of a copy, not of the file itself. More abstractly, the issue the court takes with digital ownership is that digital objects do not behave like physical objects, especially for the reasons we suppose we have based our laws of ownership upon. Yet digital objects only behave in accordance with the programing language that describes them and the actions we may perform upon them. We have control over the digital landscape in which these objects exist, and we can decide (at least to a very large degree) how they behave and how we can (and cannot) interact with them.

In summary, I posit that changes in the marketplace and in programing standard practices can help consumers have more satisfying legal relationships with their digital property. The fact that these changes are available makes it all the less likely that the law will step in and protect consumers in this area (until or unless the abuse becomes excessively wanton).

Note 1: The structure of this approach, with a law of courthouse, marketplace, and programing code, is adopted from Lawrence Lessig’s “Code and Other Laws of Cyberspace” and “Code 2.0”

Note 2: The ReDigi ruling came out last week, but I was swamped with some time-consuming law school assignments and so couldn’t write this analysis sooner.

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