Patently interesting developments in the ReDigi case

An interesting update on the ReDigi case: You will remember back in April 2013 Judge Richard Sullivan blocked ReDigi's interesting business model, holding that the first sale doctrine did not apply to digital goods - here music files. In his judgment he said “The novel question presented in this action is whether a digital music file, lawfully made and purchased, may be resold by its owner through ReDigi under the first sale doctrine. The court determines that it cannot”.  The reason, the judge ruled, is because copying, or an illegal “reproduction” of a music file, must take place, despite ReDigi’s claims to the contrary.   Judge Sullivan added “Because the reproduction right is necessarily implicated when a copyrighted work is embodied in a new material object, and because digital music files must be embodied in a new material object following their transfer over the internet, the court determines that the embodiment of a digital music file on a new hard disk is a reproduction within the meaning of the Copyright Act. The judge agreed with the claimant's (Capitol Records) claims that the service was guilty of direct, contributory, and vicarious infringement of Capitol’s reproduction rights, and said ReDigi had no fair-use defence to the infringement as the service was not "capable of substantial non-infringing use"s."

ReDigi had stressed 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 — meant that the court found that a reproduction has occurred. BUT, and its a big but, according to ReDigi the company has a newly awarded US patent that 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". Re-Digi had already alerted the World to it's soon to be launched '2.0' version with 'patent pending' technology when it lost the first round court case - well the pending is over and it's here - and it seems 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” along with a “removal and monitoring mechanism: a digital management application that helps sellers identify and ensure personal-use copies of the sold media are removed.” Seemingly this technology took almost five years of research and testing before the United States Patent and Trademark Office granted ReDigi’s patent. will it make a difference? Well, an appeal against Judge Sullivan's ruling is expected by ReDigi, so watch this space!

More on Computerworld including an interview with Re-Digi's John Ossenmacher here