Capitol Records v. ReDigi: The First Sale Doctrine and MP3s

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The Southern District Court of New York has granted summary judgment in favor of the copyright holder in Capital Records v. ReDigi regarding the reproduction and distribution rights, essentially holding that consumers cannot resell their legally purchased MP3s. Summary judgment was denied regarding infringement of the plaintiff’s performance rights.

The opinion by Judge Richard J. Sullivan begins by specifically noting at the outset that the issues in this case are “narrow, technical, purely legal.” The court found that (1) ReDigi infringed upon Capitol Records’ rights of reproduction and distribution, and (2) ReDigi could not benefit from the fair use defense or the first sale doctrine.

ReDigi is a music resale website that allows users to sell mp3s originally purchased from iTunes or other ReDigi users; the ReDigi receives a fee on every transaction. The website validates the mp3s to ensure that the user has not retained copies on his computer. Once a file is validated, ReDigi “migrates” it to its “Cloud Locker,” or remote server. It is this migrating process that was at issue in the case. Plaintiff Capitol Records asserts that the process “necessarily involves copying,” and thus constitutes infringement. Defendant ReDigi, asserts that the process is “analogous to a train,” with pieces or packets being moved from one location to another, so that the data exists only in one place at a time.

The Court specifically focused on the reproduction right, noting that the Copyright Act address the creation of new material object, rather than the creation of an additional object, and thus rejecting ReDigi’s argument. The Court found that “ReDigi’s service by necessity creates a new material object when a digital music file is either uploaded to or downloaded from the Cloud Locker.”

The Court also found that ReDigi was not entitled to benefit from the fair use defense regarding the reproduction and distribution rights. The Court agreed with Plaintiff Capitol Records’ assertion that uploading and download incident to sale are not covered by the fair use defense. Finally, the Court found that ReDigi could not benefit from the first sale doctrine.

For more information:

“Capitol wins digital records lawsuit vs ReDigi start-up,” April 1, 2013, http://www.reuters.com/article/2013/04/01/us-capitolrecords-redigi-lawsuit-idUSBRE9300GB20130401

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Declaratory Judgment Action Filed over the Rights to “Happy Birthday”

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Everyone knows it; from young children to centenarians. But did you know that Warner Brothers Music Group claims that it still holds the copyright to the song “Happy Birthday”? Good Morning To You Productions Corp., a New York company that says it is making a documentary about the song, has recently filed a suit in the Southern District of New York, seeking both declaratory judgment and restitution of all of the fees collected by Warner Brothers. Good Morning to You Productions intends to make a documentary on the song, its history, and the legal grey area it inhabits.

While you might have assumed that something as ubiquitous as “Happy Birthday to You” is in the public domain, Warner Brothers has held itself out as owning the copyright to the song for over 70 years. Thankfully, most parents are protected from suit for singing to their children at home over a cake under the Copyright Act’s fair use provision, 17 USC 107. However, most experts agree that technically, singing the song outside, i.e., at a restaurant, in a park, or elsewhere, constitutes a “performance” under the Copyright Act, and are therefore open to suit. (see 17 USC 106). If it wins the suit, Warner Brothers could potentially hold the rights to the song for at least another 20 years.

The foundations of the Good Morning to You Productions lawsuit lie in the origins of the song itself. The original melody comes from a 19th century song called “Good Morning to All,” written by a pair of schoolteachers in the mid-1890’s.  It wasn’t until 1924 that the lyrics we know today were added to the melody, thus becoming a new, registrable copyright. In 1935, the lyrics were added to the original melody of “Good Morning to You.” Since acquiring the right to the song in 1983, Warner Brothers has brought in about $2 million annually on licensing fees to movies and other media.

Dr. Robert Brauneis, a Professor of Law at George Washington University Law has written an article on the strengths and weaknesses of the Happy Birthday copyright claims. In his article, Dr. Brauneis opines that there are three main weaknesses to Warner Brothers’ argument that it holds a protectable copyright: (1) if the copyright attached at all, it was not renewed in 1963, when it ostensibly terminated; (2) under the copyright laws in force in 1935, the first publication of “Happy Birthday” had a flawed copyright attached, likely expelling it into the public domain; and (3) there appears to be little in the way of a provable chain of title establishing Warner Brothers as the current owner of the copyright.

One of the main reasons that Warner Brothers has seemingly succeeded in its continuous quest for fees seems to be that no one has ever challenged its right to do so before. This behavior is one of the factors that Good Morning To You asserts is evidence of a fraud perpetrated on the public by Warner Brothers under California’s Unfair Competition Law. If this suit should succeed, not only would Warner Brothers lose its copyright, it could also be required to disburse the millions of dollars in fees it collected since 1983.

Regardless of how this suit proceeds, it is a valuable lesson to the public at large: just because someone tells you that they own a copyright does not mean that they do. Due Diligence on the registration of a work is always beneficial.

A copy of the complaint is available on Techdirt, here: http://www.techdirt.com/articles/20130613/11165823451/filmmaker-finally-aims-to-get-court-to-admit-that-happy-birthday-is-public-domain.shtml

For more articles on this topic, try visiting:

http://www.nytimes.com/2013/06/14/nyregion/lawsuit-aims-to-strip-happy-birthday-to-you-of-its-copyright.html?_r=0

http://news.insing.com/tabloid/happy-birthday-to-you-belongs-to-us-all-lawsuit-says/id-ae763f00

“Copyright and the World’s Most Popular Song” is available by SSRN here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1111624

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