Capitol Wins Court Case Against 'Used' Digital Music Track Seller

One Win For The Tower

U.S. District Judge RICHARD SULLIVAN has ruled in favor of CAPITOL RECORDS LLC in that start-up REDIGI INC has infringed upon the label's music copyrights, REUTERS reports. He ruled that REDIGI was not authorized to allow listeners to use its platform to buy and sell "used" digital music tracks originally bought from APPLE INC.'s iTUNES website.

The decision will undoubtedly harm efforts to create online marketplaces for used digital goods, akin to how used books and records might be sold in stores. "This will profoundly affect the economics of any digital re-sale marketplace, by limiting what can be sold as 'used' or forcing sellers to obtain copyright holders' approval before transacting business," GIANTSTEPS MEDIA TECHNOLOGY STRATEGIES Pres. BILL ROSENBLATT said.

The ruling snags REDIGI's plans to give a cut of proceeds from re-sales to copyright holders and the firm was escrowing money for record labels from completed digital music transactions.

The judge also cited some open issues remain over CAPITOL's performance and display rights, as well as damages and injunctive relief that could result in REDIGI being shut down. He directed both companies to advise in writing by APRIL 12th on the next steps in the case. CAPITOL sought damages of $150,000 per infringement.

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