Resell MP3s, no copyright infringement? ReDigi 'copy-less' digital transactions patent

We can upload and download music, movies, e-books and most any digital thing to the cloud, but not for the purpose of resale without wading into the murky waters of copyright infringement. But if you listen very carefully, then you might hear netizens breaking into the Hallelujah Chorus because ReDigi, the “world's first pre-owned digital marketplace,” has a newly awarded patent for tech capable of “copy-less” digital transactions.

Sell your used MP3s, ReDigi awarded patent for copy-less digital transactions

After ReDigi launched in 2011, allowing people to buy and sell previously owned MP3s, Capitol Records thought the sky was falling and quickly had a copyright infringement cow; it claimed that the first-sale doctrine couldn’t possibly apply to electronic files.

According to the first-sale doctrine, a person who lawfully owns copyrighted material has the right to sell their copy of it to a new owner who can decide to keep, give away or sell it; but having failed to innovate and instead choosing to stick to a broken business model, Capitol claimed the 1854 law applied only to copyrighted works in physical objects.

Everytime you download music, movies, God kills a kitten

After all, why should the music industry innovate when it can instead sue and come up with slogans turned memes? Capitol filed a preliminary injunction to shut down ReDigi, demanding ReDigi remove all Capitol-owned music and suing for damages of up to $150,000 per track.

In 2012, legal round one went to ReDigi. ReDigi's Founder and CEO John Ossenmacher said, "We hope Capitol can get back to their business and find a way to catch up to the times instead of trying to stop the innovation process, denying rights to their paying customers along the way."

But in 2013, a federal judge sided with Capitol Records and ruled that the resale of MP3s violated copyright law because ReDigi’s technology amounted to creating a copy. The judge wrote:

ReDigi stresses that it “migrates” a file from a user’s computer to its Cloud Locker, so that the same file is transferred to the ReDigi server and no copying occurs. However, even if that were the case, the fact that a file has moved from one material object — the user’s computer — to another — the ReDigi server — means that a reproduction has occurred. 

Ah, but according to ReDigi, the company’s newly awarded patent covers a method for “atomic transaction: a cloud-based mechanism that instantaneously transfers an ‘original’ good from one owner to the next, without making a copy.” ReDigi’s patent also covers a “verification engine: a mechanism that analyzes each digital media file that enters the ReDigi system to ensure that it is legally eligible for resale.” And a “removal and monitoring mechanism: a digital management application that helps sellers identify and ensure personal-use copies of the sold media are removed.” This technology took almost five years of research and testing before the United States Patent and Trademark Office granted ReDigi’s patent.

The company expects to also be granted additional patents, including “ReDigi's ‘Active Digital Security’ platform, a game-changing security technology so advanced it is becoming the new baseline for the industry globally.”

Unlike the physical world where copyright holders and creators of content do not share in the resale value chain, artists can register and get paid for secondary sales on ReDigi. The company said, “The digital marketplace presents unique opportunities that industry insiders acknowledge are too lucrative to pass up.” In fact, in 2013, Apple and Amazon decided they wanted a piece of that juicy pie and filed patents that would allow users to sell or give away music, movies, e-books and software. But that takes us back to the murky copyright waters of "copy and delete" mechanisms and technology.

ReDigi’s patent allows for digital resale without making a copy at all. “ReDigi believes that its ‘copy-less’ digital technology is far superior to these systems as it addresses the concerns raised by copyright holders that the resale of digital content via a reproduction violates copyright law.”

ReDigi’s John Ossenmacher stated, "ReDigi's technology is significant and readily corrects early industry issues that have plagued digital retailing, including piracy, and opens new opportunities that allow consumers to use their digital media as currency for funding new purchases, in some ways transforming digital media analogous to digital bit coins. We are committed to ongoing innovation and ensuring that all parties, including consumers, copyright holders, and those who create the content have the opportunity to benefit greatly from the multi-billion dollar market in digital media that is owned by the consumer."

Ossenmacher was kind enough to answer a few of my questions:

When will the options be available to resell previously-owned software, e-books and audiobooks?

Ossenmacher: eBooks and audio books are scheduled to be rolled out in the US and EU this year. Software will be released in Europe in 2014.

Do you have plans to eventually allow the resale of movies?

Ossenmacher: Yes, we are currently working with some studios on a timeframe, ReDigi's technology is capable of accommodating all forms of digital media, including movies.

Do you have anything to say to the RIAA or others who failed to innovate when you've proven there's a market and found a way to insure it's legal?

Ossenmacher: We remain confident in our technology and business model, which is good for everyone from consumer to copyright holder, and our focus is on continued innovation. We are seeing signs that the music industry is starting to realize how good the freeing up of digital cash is for their business, artist and their consumers. In the end, the market speaks for itself.  

Indeed it does. Take that RIAA, Capitol Records, MPAA and other copyright infringement sue-happy companies. And congratulations ReDigi! According to the patent, there is no reproduction, no copy per say, which was the legal issue. Why not head over to ReDigi now to buy or sell ‘gently used’ digital music?

Copyright © 2014 IDG Communications, Inc.

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