Mackall, Crounse & Moore, PLC has joined Dewitt Ross & Stevens S.C.

The newly formed DeWitt Mackall Crounse & Moore S.C. will provide clients with enhanced legal services
and efficiencies as well as access to more than 100 attorneys practicing in nearly 30 areas of
law in Wisconsin and Minnesota.

Dismiss this message

×

News & Education

Back to Firm News

Filter by:

First Sale and Fair Use in the Digital Age

For decades, music recordings were typically distributed using some type of physical media—records, tapes, CDs, etc. The purchaser of a legitimate copy of music had the right to give or sell that copy to anyone else under the First Sale doctrine without the copyright holder having a claim for infringement, giving rise to used music stores.

recordsToday, virtually all music is distributed digitally either via streaming services or the purchase of digital copies. Following the used music store mode, ReDigi Inc. opened an online used digital music store where consumers could resell digital downloads.

A consumer interested in reselling music using the ReDigi system installs a computer program which scans the computer to identify all legitimate copies of music and creates a list of songs available for resale. If the consumer elects to offer such a song for resale, the program breaks down the digital file for the song into small pieces of code which are then copied to ReDigi’s server (and deleted from the consumer’s computer), where it resides until it is transferred to a purchaser’s computer.

Capitol Records and several other major record labels sued to shut down ReDigi’s used digital music store. At trial, ReDigi presented a technical argument that its system only worked with legitimate copies of the song and there was never more than one complete copy of the song at any point in the process. ReDigi also presented a legal argument there was no infringement, asserting the First Sale and Fair Use doctrines. Recently, the Court of Appeals for the Second Circuit sided with the record labels.

The Court concluded that ReDigi could only rely on the First Sale doctrine if no new copies of the digital file are made. The Court found that the ReDigi system does not transfer the original copy of the digital file for the song. Instead, the ReDigi system creates at least two new copies—one on ReDigi’s server and one on the purchaser’s computer. According to the Court, the destruction of the original file on the seller’s computer such that only one copy remains does not change the fact that two new copies are created and retained for a period of more than transitory duration.

The Court also rejected ReDigi’s Fair Use argument, stating:

Even if ReDigi is credited with some faint showing of a transformative purpose, that purpose is overwhelmed by the substantial harm ReDigi inflicts on the value of [the record labels’] copyrights through its direct competition in the [record labels’] legitimate market, offering consumers a substitute for purchasing from the [record labels]. We find no fair use justification.

As this case illustrates, properly advising clients often requires a combination of legal and technical expertise.

In December, DeWitt added three new intellectual property lawyers known for their abilities to analyze complex legal issues related to various technologies. Please contact us when you have legal needs involving technology.

About the Author

James Nikolai is an intellectual property attorney in DeWitt’s Minneapolis office. Jim has substantial experience representing clients in the areas of patents, trademarks, copyrights, trade secrets, software protection and licensing. He has successfully represented both plaintiffs and defendants in litigating intellectual property claims. If you have any intellectual property questions, you can reach Jim by email or at (612) 305-1518.

Disclaimer

One of the best features about our website articles and blog entries is that they are timely—you get up-to-date information on the law as it exists at the time. The downside is that the law changes, but our older entries don't. That means we can't guarantee you are getting the most current law when reading through past entries.

Please don't take these articles and blog entries and rely on them as legal advice. Give us a call instead, for specific and pointed advice for your particular situation. Note that contacting us does not create an attorney-client relationship, unless you are accepted as a client of the firm.

Our Locations

Madison

2 East Mifflin Street, Suite 600
Madison, WI 53703
(608) 255-8891
Get Directions

Greater Milwaukee

13845 Bishop’s Drive, Suite 300
Brookfield, WI 53005
(262) 754-2840
Get Directions

Minneapolis

2100 AT&T Tower,
901 Marquette Avenue
Minneapolis, MN 55402
(612) 305-1400
Get Directions


Get to know us

DeWitt LLP is one of the ten largest law firms based in Wisconsin, with an additional presence in Minnesota. It has nearly 140 attorneys practicing in Madison, Metropolitan Milwaukee and Minneapolis in over 30 legal practice areas, and has the experience to service clients of all scopes and sizes.

Our People
Our Law Firm
Leadership
Areas of Expertise
News & Education
Contact Us

Partners

We are an active and proud member of Lexwork International, an association of mid-sized independent law firms in major cities located throughout the Americas, Europe and Asia and an active member of SCG Legal, an association of more than 140 independent law firms serving businesses in all 50 state capitals and major commercial centers around the world.

Awards

Best Lawyers 2013 – 2018
Compass Award 2012
Top 100 Lawyers: National Trial Lawyers Association

  • blf-badge-2016
  • blf-badge-2017
  • Ramac Member Logo
  • blf-badge-2018

NOTICE

While we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you (an “engagement letter”). You will not be a client of the firm until you receive such an engagement letter.

The best way for you to initiate a possible representation is to call DeWitt Ross & Stevens at 608-255-8891. We will make every effort to put you in touch with a lawyer suited to handle your matter. When you receive an engagement letter from one of our lawyers, you will be our client and we may exchange information freely.

Please click the “OK” button if you understand and accept the foregoing statement and wish to proceed.