iHard: Bruce Willis and ownership of downloaded content

It seems that last week’s widely-repeated story that Bruce Willis was preparing to sue Apple for ownership of songs downloaded from iTunes was unverified and probably untrue.

Journalists can be forgiven for hedging their bets however, as resale of digital assets a complex subject. In fact, you could say it is pretty “iHard” to understand.

A licence to use
When you buy a music download you are actually paying for a contractual right – a licence – to permit you to do something with that copyright work that would otherwise be contrary to the author’s copyright. (For further discussion of the bundle of rights which protect songs, read this Tech Blog from last September.) 

The licence will set out what you can do with the copyright work, e.g. listen to it in private, burn it to CD/download it to other devices up to a set number of times etc. If what you are doing is not expressly permitted under the licence then you are probably infringing copyright.

In this respect the rights obtained by a purchaser of a music download from iTunes are no different to the rights acquired by a purchaser of a CD from a high street store. If you buy a CD you own the physical CD, but you don’t own the songs on it.

The practical differences are that:

  1. the licensed products are embodied in a physical CD, permitting easy transfer; and
  2. the first-sale doctrine applies to CDs.

The first-sale doctrine provides that once copyright products embodied in a physical object are introduced in the market in a given territory, the right holder loses control of them, and they can be freely resold, lent, or given away by the purchaser. In other words, the purchaser of a CD containing songs has the right to resell, lend or give away their copy of the songs (although not copies of their copy – which is an important distinction.)

The first-sale doctrine
There are various historical justifications for the first-sale doctrine (market failure; the free movement of goods; the impossibility of controlling the uses of a purchased copyright work; enhancing the circulation of culture), and a very similar concept called “exhaustion of rights” exists in the EU.

The catch is that the World Intellectual Property Organization Copyright Treaty (the international treaty on copyright law adopted by the member states of the World Intellectual Property Organization, including the US and, through the Council of the European Union, the EU) limits application of the first-sale doctrine to “fixed copies that can be put into circulation as tangible objects- not intangible content distributed over the internet”.

This means that if the licence for a digital copyright work prevents making copies of it, or prevents transfer of the licence, then reselling, lending or giving away that work is forbidden. (The degrees to which major players such as Amazon and Apple explicitly forbid such transfer is a matter of licence interpretation, and tends to be debated amongst lawyers and academics.)

Posited potential “workarounds”, particularly in the case of death of the owner, include: creating a legal trust (though this seems far-fetched – you can’t change a licence through a trust); burning your media onto a device and bequeathing that device in your will; or writing down the password. As noted above, the legality of these methods will depend on interpretation of particular licence terms.

The distinction between physical and digital content appears increasingly untenable
The European Court of Justice recently ruled that, in relation to a computer program, the rights of the copyright owner Oracle in relation to a copy of is software had been exhausted – even though the software had been downloaded from the internet. 

The judgment addressed the distinction between tangible or intangible forms of the computer program, concluding (via a rather circuitous route that deeemed the Computer Program Directive to be a lex specialis of the Copyright Directive):

it must be considered that the exhaustion of the distribution right under [the Computer Program Directive] concerns both tangible and intangible copies of a computer program”

In theory therefore, although the judgment’s treatment of the tangible/intangible issue is far from the most robust reasoning you will ever read, this suggests that in certain circumstances exhaustion of rights in “used” digital content may be possible.  (If resale of software is an issue of particular interest to you, please read my colleague Martin Sloan’s in-depth summary of the judgement and his key points.)

Similarly, there is forthcoming litigation in the US regarding the legality of reselling of “used” digital songs. Capitol Records is suing ReDigi, a Massachusetts start-up which runs an online marketplace where individulas can resell music files. The legality of ReDigi’s business model will probably turn on whether it is making a copy of the song when it moves the “used” files it to its cloud servers. Capitol has insisted in its filing that copies are being made, claiming: 

While ReDigi touts its service as the equivalent of a used record store, that analogy is inapplicable: used record stores do not make copies to fill up their shelves”

As discussed above, making copies of copies isn’t protected by the first-sale doctrine, so ReDigi will have to prove that only a single copy of a song is being used throughout its entire sales process (as well as finding its own way around the tangible/intangible goods issue).

Hudson Hawk
In the meantime, I appreciate you may have been lured to this blog post on the promise of Bruce Willis, and been subjected to law instead.  So, in a wonderful scene from the unfairly maligned Hudson Hawk, let’s round things off by enjoying Swinging on a Star.

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