$3.5 MILLION AWARD IN CASE INVOLVING RESALE OF DIGITAL MUSIC
This case presented an issue of first impression as to whether the first-sale doctrine of the U. S. Copyright Act permits consumers who lawfully purchase digital music via iTunes to re-sell the recordings. We represented plaintiff record label, Capitol Records, which is part of Universal Music Group, in a copyright infringement action against an online start-up company, ReDigi Inc., which claims to operate the world’s first secondary market for online music. Capitol’s motion for summary judgment was granted and the court held that ReDigi had direct, contributory and vicarious liability. Capitol Records, LLC v. ReDigi Inc., 940 F. Supp. 640 (S.D.N.Y. 2013). – When the founders of ReDigi claimed they had no individual liability, the Court denied their motion to dismiss. This case was then settled without trial for a damage award of US$3.5 million, subject to ReDigi’s appeal of the award of summary judgment. However, ReDigi filed for bankruptcy, so the appeal has been stayed, although the stay recently was lifted. Richard Mandel and Jonny King represent the plaintiff Capitol Records, LLC.