Yesterday I received a press release from ReDigi, the company trying to allow (and monetize) the resale of “used” digital goods such as music or e-books, with an embargo time of, well, right now. The release claims the award of a patent on the technology ReDigi wants to use to enable the resale of digital media. It says the patent covers the transfer of digital media files without making a copy.

ReDigi has been in the news a great deal in the last couple of years. The RIAA complained, and record label EMI sued, over ReDigi’s plan to allow people to resell used music after they were done with it. ReDigi insisted their resale was fair use, and Google sought to file a neutral amicus brief on the matter. The judge decided to allow ReDigi to continue to operate pending the outcome of the suit. Meanwhile, Amazon received a patent of its own on a used-digital-goods marketplace (ReDigi insisted that it was not the same as the method they used).

The trial went against ReDigi, however. The judge’s decision turned on the fact that a copy was made as part of the “resale” process—when you upload the file to their server for verification—which was a no-no. “The first sale defense does not cover this any more than it covered the sale of cassette recordings of vinyl records in a bygone era,” he said.

Yet here ReDigi is, claiming that its patent features “a cloud-based mechanism that instantaneously transfers an ‘original’ good from one owner to the next, without making a copy.” It adds:

In contrast to ReDigi’s patented technology, other media companies employ significantly different, more traditional “copy and delete” mechanisms and technology.  ReDigi believes that its “copy-less” digital technology is far superior to these systems as it addresses the concerns raised by copyright holders that the resale of digital content via a reproduction violates copyright law.

I emailed back with a question about how this worked, and the ReDigi representative explained that, if you’re signed up with ReDigi and have the ReDigi app on your computer, any digital media you buy that ReDigi is able to resell lands in the ReDigi cloud without ever touching your computer. You then download a copy from the ReDigi cloud to play it, but the original copy you bought lives in their cloud, and when you sell it to someone else all your local copies of it are deleted and the ownership of the cloud copy is transferred to that other person—and then they can download a copy and play it, etc.

I must admit, it’s a pretty slick bit of rules lawyering. If first sale rights only apply to the exact copy you bought, ReDigi essentially positions itself as the locker where you store the exact copy you bought. The un-resalable copy is the one you download to your own computer. This doesn’t solve the problem of bought media you already had on your computer before you signed up with ReDigi, which is why ReDigi does not currently allow resale of such tracks. If the price of doing business was ReDigi only worked to resell stuff you bought after you signed up with them, I imagine they could still work that way, though the ReDigi rep said that “could, and is expected to, change in the future.”

Of course, it’s fundamentally ridiculous that this kind of tortuous workaround might even (theoretically) make a difference. The effect is the same either way, it’s just that the order of steps is different. Is downloading through an intermediary really all that’s necessary to make digital resale legal? Either way, it’s symptomatic of the increasing creakiness of trying to adjudicate digital media using copyright laws that are fundamentally the same as those developed in the era of the quill pen.

And needless to say, you could probably work around it easily enough. Burn your music to a CD before you sell it. If you re-rip it, it won’t be the same track you just sold; can ReDigi detect that? Even if you don’t re-rip it, you can still play it from your CD. As for e-book files, if you crack the DRM and convert it to another format, will it count as the same file for the purposes of ReDigi’s checker? I have my doubts.

It’s also worth noting that just because the patent was issued does not mean it is legally valid. It seems as though ReDigi has effectively patented a cloud storage locker, which would probably come as a surprise to any of the numerous other businesses that operate such lockers or that sell their own goods from the cloud. When you buy an e-book on Amazon, for example, you also have an “original” copy in the cloud that you own. And Amazon itself patented a method for allowing the resale and ownership transfer of such, for all that ReDigi claimed it used an entirely different process than its own.

Either way, the novelty of this case means it will likely end up being heard by the Supreme Court sooner or later. We’ll just have to see what they say.


  1. “If first sale rights only apply to the exact copy you bought, ReDigi essentially positions itself as the locker where you store the exact copy you bought.”

    Called it:

    TBH it was pretty obvious that ReDigi would argue something like this. They changed their TOS after they lost the lawsuit and it implied as much.

    BTW, don’t forget about the Apple patent:

  2. Thanks for this post, Chris.

    What I was wondering after reading this is whether the copy that the original buyer listens to is unlawfully created. Since the original copy is on the ReDigi server, wouldn’t it mean that as the original buyer obtains the song from there, there is reproduction?

  3. SR,

    The transfer of rights/license goes like this. The owner of the copyrighted material leases the material to the publisher who then has the right to license it through sales venues like Kindle to the reader via another license

    So, yes, the original “buyer” does have a legal licensed copy. That copy cannot be resold, loaned, or distributed because the license the “buyer”/reader has prohibits that in almost all cases.

    ReDigit may have a patent now, but they will have to fight this through the court system to use it, and as current case law stands, I doubt they will win.

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