Does the First Sale Doctrine Apply to Digital Music?

ScreenShot007The Berkeley IP weblog has an interesting post regarding the the “first sale doctrine” and its application to music downloads. The controversy is whether Warner Music Group (WMG) content downloaded through Rhapsody/iTunes is licensed or purchased. 

Tom Waits’ contract with WMG entitled him to a high royalty for third-party licenses but a lower royalty for the sale of copies.  In a case filed last week, by Waits’ former production company, WMG is likely to take the position that its downloads are sold just like physical products — thus resulting in a lower royalty. Of course, WMG’s expected argument flies in the face of the “terms of service” agreed to by users to any of the popular mp3 download sites.

All of this begs the question of whether associating the sale of mp3 files with the sale of physical CD’s gives purchasers the right to resell under the first sale doctrine. (The U.S. Gov’t thinks not.)

Links:

  • Link: Reuters Article
  • Link: Duke Law & Technology iBrief on First Sale
  • Link: EBay restrictions on resale of digital music