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Capitol Records, LLC v. ReDigi Inc.

910 F.3d 649 (2018)

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Capitol Records, LLC v. ReDigi Inc.

United States Court of Appeals for the Second Circuit

910 F.3d 649 (2018)

Facts

ReDigi Inc. (plaintiff) created a digital resale marketplace for digitally purchased music files. After a seller uploaded a digital music file to ReDigi’s marketplace, it was deleted from the user’s computer, ensuring that only one copy of the music file ever existed. If the user then sold the file, the buyer could either access their newly purchased music file on ReDigi’s platform or could download a copy to their own computer. If the buyer downloaded the music file, it was deleted from ReDigi. Capitol Records, LLC (Capitol) (defendant), which owned copyrights to songs resold through ReDigi, sued ReDigi for copyright infringement, arguing that ReDigi’s resale marketplace reproduced and distributed Capitol’s copyrighted works without authorization. The district court held ReDigi liable for copyright infringement, holding that ReDigi’s resale process created duplicate phonorecords of the digital music files on ReDigi’s server and on the buyer’s device without Capitol’s authorization. ReDigi appealed, arguing that (1) the first-sale doctrine protected their users’ right to resell their digital music files; (2) there was no unauthorized reproduction because only one copy of the music file existed at a time; and (3) prohibiting resale of digital files unfairly disadvantaged digital purchasers.

Rule of Law

Issue

Holding and Reasoning (Leval, J.)

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