US ruling threatens second-hand digital market

Douglas Heaven, reporter

(Image: Richard Cummins/Corbis)

So much for the second-hand digital economy. A US court ruling in a copyright infringement dispute between Vivendi's Capitol Records and ReDigi - a pioneering website that lets people trade in "used" digital music files - has effectively shut down the nascent market for second-hand digital goods, in which Amazon and Apple also both have a patent interest.

The judge upheld the record company's claim that ReDigi's technology for transferring files between users resulted in illegal duplication. ReDigi maintains that its software avoids duplication, ensuring there is only ever a single instance of a file as it is transferred over the internet from the seller's computer to the buyer's via ReDigi's servers.

The ruling draws a new line in the sand in the face-off between two concepts of digital possession. On one hand, we have the notion of digital goods as virtual versions of material ones and thus subject to the same rights of ownership, such as resale. On the other, we have the notion of digital goods as licensed services.

Under the licence model, purchasing digital music from iTunes, for example, does not give you the digital equivalent of a CD that you can pass on to someone else, but merely a licence to listen to that music. The advantage is that if you lose the iPhone storing your downloaded Beyonc? track you can simply download a replacement. But you do not have the right to transfer that licence.

ReDigi sought to get round that by treating a digital file as if it were a material entity, enforcing uniqueness. But the judge wasn't convinced. The ruling invokes "the laws of physics" to demonstrate that a digital transfer from one hard drive to another necessarily involves the creation of a new instance, violating the US Copyright Act.

It is not yet clear how this might apply to European markets, which are subject to an European Union ruling that software can be resold.

Source: http://feeds.newscientist.com/c/749/f/10897/s/2a3f8bf7/l/0L0Snewscientist0N0Cblogs0Conepercent0C20A130C0A40Cus0Eruling0Ethreatens0Egrowth0Eof0Bhtml0Dcmpid0FRSS0QNSNS0Q20A120EGLOBAL0Qonline0Enews/story01.htm

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