Judge Tosses Universal Music Lawsuit Against Promo CD Seller

Authored by Mark Hefflinger on June 12, 2008 - 9:36am.

San Francisco - A federal judge has dismissed a lawsuit filed by major label Universal Music Group against a California man who sold promotional CDs from the label on eBay. U.S. District Court Judge S. James Otero ruled that the promo CDs are gifts distributed by UMG, as they are mailed free and unsolicited to thousands of people -- including music journalists and radio stations -- without any expectation or intention of their return.

The "first sale" doctrine says that once the copyright owner sells or gives away a copy of a CD, DVD, or book, the recipient is entitled to resell that copy without further permission from the copyright owner.

"This is a very important ruling for consumers, and not just those who buy or sell used CDs," said Corynne McSherry, staff attorney at the Electronic Frontier Foundation, which represented defendant Troy Augusto.

"The right of first sale also protects libraries, used bookstores, and businesses that rent movies and videogames. This ruling affirms and protects the traditional balance between the rights of copyright owners and the rights of the public."

Universal Music Group plans to appeal the ruling. "In granting Augusto's motion, we believe that the Court's analysis is incorrect in a number of critical respects," said spokesman Peter Lofrumento.

"We intend to file an appeal and we are confident that we will prevail."

The ruling follows the arrest earlier this week of a London DJ, on charges that he sold pre-release albums from record labels on eBay.