A New Case Questions First Sale Doctrine and Digital Media – Might Mean Used Games are A-OK

Image from Wired.com

So, hot on the heels of my article about the used game business and the move to digital distribution comes a court decision that will have a significant impact on whether the used games business will continue to have a business, and whether something like Xbox720s no used rumor is even an option. 

So the article on Ars Technica is about Capitol Records Inc vs. ReDigi, Inc.  ReDigi is a pre-owned resale service for digital music.  Capitol Records sued ReDigi last month for copyright infringment, and asked for a preliminary injuction — which means Capitol asked the judge to just say they were right without going it going to trial. 

Faced with this, Judge Richard Sullivan of a New York court denied the preliminary injuction – meaning that it has to go to trial.  The ruling was rather … brief and not horribly informative.  Basically, all we know is that Judge Sullivan considered previous cases, first-sale doctrine, and the legal theory of those who have legally obtained copyrighted theory have the right sell it (which is currently in contention). 

The Ars article also cites a few other cases, both for and against the media and first-sale doctrine. 

So, why does this matter for games?  Well, there’s a couple reasons. First, the willingness of Judge Sullivan to send the case to trial means that there’s significant doubt in his mind as to the validity of Capitol’s argument that ReDigi is engaging in copyright infringement.  Even the judges unwillingness to give a preliminary injunction is a win for the ReDigi company.  What will hopefully come out of the case will be clarification of consumers rights when buying licensed content–and hopefully in the consumers favor. 

The ideal situation would be that selling used media (music, movies, games) would be protected by the First Sale doctrine, which means that after the first sale, the content creator no long controls the content and the purchaser can do whatever s/he would ike with the content as long as it’s not infringing.  In this case, the purchaser should be able to sell their “license” of the software without the permission of the original content creator. 

So, if the case comes out where media is protected by first sale doctrine, the Xbox720 unability to play used games would likely be seen as a circumvention of the first sale doctrine, which would probably lead to a minimum, a lengthy legal battle and at most, a force recall to remove the used game restrictions.  It would also mean that so decried used games business would continue happily along, providing their services to consumers. 

Additionally, platforms depending on the outcome of this case, platforms like Steam, Origin, and Impulse could also begin to sell “used games” to people at a discounted price.  In the case of Origin isn’t such a big deal per se, but for Steam and Impulse would essentially be digital visions of GameStop’s brick and mortar stores.  In fact, with GameStop’s 2011 acquisition of Impulse might point to GameStop already putting these pieces in place. 

Overall, it’s a really exciting possibility toward getting greater consumer rights when it comes to digital media, which is an increaseingly sensitive and timely subject as more of our media is managed and owned “digitally.” 


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