The ReDigi legal battle heats up: Google to the rescue?

redigiDigital music reseller ReDigi is the latest online content distributor (or redistributor) to find itself in legal trouble. The site launched in October 2011 as a service for users to sell old digital music files and gain points toward buying new ones. Digital music has solved many problems with its tangible counterparts, but buyers aren’t able to sell or trade-in used copies.

ReDigi capitalized on this problem, and insisted its system was legal. When you sell a file on ReDigi, the software cleans your computer of that file so you no longer have access to it – and it also makes sure you didn’t obtain it illegally. “It is a bit like CSI: ReDigi,” CTO Larry Rudolph told us in October. “In addition to the obvious, there are many subtle clues that determine resale eligibility of each track. We are extremely cautious and our technology is incredibly thorough in determining the eligibility of a music file.”

According to the RIAA, not thorough enough. Shortly after launching, the organization sent ReDigi a cease-and-desist letter to halt its service (for the record, the site remains up and running), which was soon followed by a copyright infringement lawsuit from Capitol Records. The EMI label takes issue with a few of ReDigi’s practices, including:

  • “ReDigi makes and assists its users in making systematic, repeated and unauthorized reproductions and distributions of Plaintiff’s copyrighted sound recordings… [It] uploads copies of those recordings to its service for interested ‘sellers,’ and then downloads copies for and to interested buyers.”
  • “[The service] streams 30 second clips of each recording to interested shoppers and allows them to store those clips on their hard drives, all without Plaintiff’s authorization or approval.”
  • “ReDigi also displays throughout its site unauthorized copies of cover artwork Plaintiff owns and uses in connection with its sound recordings.”

And most damning:

  • “While ReDigi touts its service as the equivalent of a used record store, that analogy is inapplicable: used record stores do not make copies to fill their shelves. ReDigi is actually a clearinghouse for copyright infringement and a business model built on widespread, unauthorized copying of sound recordings owned by Plaintiff and others.”

What Capitol wants is for the powers that be to pull any music under its umbrella before the case actually goes to court, as well as $150,000 for each of its music files ReDigi has resold. ReDigi, of course, has responded saying that Capitol’s claims are without merit because:

  • Those 30 second clips are provided via a licensed streaming service, not ReDigi.
  • ReDigi claims it does not copy any music: “The only copying which even arguably takes place is in the upload into the user’s Cloud Locker, and the download from the user’s Cloud Locker, both of which are obvious fair uses.”
  • Because the service is dealing with digital music, it isn’t subject to the distribution rights claims that Capitol is enacting. ReDigi says these apply to “’copies’ and ‘phonorecords’ which are defined as ‘material object.’”
When asked if the newly launched company had foreseen these types of legal battles, founder John Ossenmacher explains the site had taken precautions. “We had been talking to labels for over two years and all of our feedback was positive — we even received input from people at the major labels on ways in which to structure and improve our marketplace,” he tells us. “We were blind-sided when we got a letter from the RIAA and shortly thereafter EMI decided to make false allegations and sue us.”
But if we’ve learned anything in the past few years, it’s that content rights holders are largely able to get their way in these wars. ReDigi, however, has made a powerful (sort of) ally in Google. Google, which is entering the digital music space itself, says that while it isn’t taking sides, it does have an interest in how this whole cloud-based music industry evolves. Basically, Google argues the case needs to go to court before Capitol can yank its music from ReDigi – if anything, to help establish some boundaries that have been untested up until this point.
It’s interesting that Google would get tangled up in all this. Google Music infamously had issues partnering with major record labels, and the company’s anti-SOPA stance ruffled a few of those feathers. Now, while it’s not coming out and saying ReDigi is in the right, it is saying Capitol might be in the wrong.
But Google Music isn’t the only product Google has to think about – in fact, cloud-based storage and services apply to a number of Google products and this outweighs one measly Web property. Google has a vetted interest in the outcome of cloud-based resale laws, and it’s willing to stick its neck out a bit to move things in this direction.
Unfortunately, it doesn’t look like lending the Google name on the case will help. Google’s request was denied by Judge Richard J. Sullivan. ReDigi and Capitol will have to fight it out themselves.
Once you claw your way through the “he said, she said” and big names being thrown around in this lawsuit, you should be asking yourself what digital ownership means. When we buy things—in this case music—online, are we actually buying that file for keeps or are we just buying permissions to it? When it comes down to it, this very question and the fact that different applications Terms of Service disagree is what’s at the heart of the ensuing digital music market battles.
“As consumers spend more of  their money in the digital market we are helping to ensure that consumers’ rights to their digital property remain intact,” says Ossenmacher. “This includes the right to resell their property or to buy used property. If one wants people to value their digital music, then the digital music that they own should have value.”
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