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EFF Wins Promo CD Resale Case 252

Posted by Soulskill
from the this-promo-disc-will-self-destruct-in-five-seconds dept.
DJMajah writes "Universal Music Group's case against Troy Augusto, fought by the Electronic Frontier Foundation, has been dismissed by a federal judge. UMG sued Augusto, the owner of Roast Beast Music, over 26 eBay listings of promotional CDs. UMG argued that promo CDs distributed for free to radio stations, DJs and other industry insiders could not be resold; the discs usually carry a label reading 'For promotional use only, not for resale.' UMG asserted the doctrine of first sale does not apply, as the discs were not actually sold and therefore remained UMG's property. The judge ruled that the doctrine does apply because the discs were gifts. The labels indicate no expectation of their return."
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EFF Wins Promo CD Resale Case

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  • by Anonymous Coward on Friday June 13, 2008 @03:12PM (#23783189)
    I'm sure in the future they will modify their labels to require the return of promo materials.

    Go go EFF!
    • by despe666 (802244) on Friday June 13, 2008 @03:17PM (#23783269)
      Let them try. If they write that on that label, they will no doubt have to prove they actually recover the CDs they send, and it's not just there to get around the other judgement. And if the CD is sent unsolicited, then they will have to pay for the return fee or expose themselves to extortion lawsuits or something. Let them try to deal with that logistic nightmare.
    • by adolf (21054) <flodadolf@gmail.com> on Friday June 13, 2008 @03:38PM (#23783559) Journal
      Maybe.

      Here's the thing:

      If [insert RIAA member here] notices that I am a program director at a radio station and sends me a promo CD in the mail with my name on it, then it's mine. I can listen to it, sell it, throw it out, give it away, copy it to my iPod, dupe it for the car stereo, and set it on fire. About the only thing I can't legally do is give a copy to a third party (in violation of copyright law).

      Merely receiving something in the mail does not obligate me to do anything that the sender asks. If the sender wants it returned, that's fine; they can want it all week and it'll still never happen.

      I mean, imagine it if you will, AC: Suppose I sent you a CD with a label on it which said "Please return to avoid a $250,000 fine, 5 years in jail, or both." Worse, suppose such a CD gets lost in the mail.

      Either way, you don't have to do a thing. Were things any other way, we'd see huge numbers of positively ugly scams circulating the USPS, where by inaction alone, simple homeowners would be victimized by their own fucking mail.

      (I'm sure that one of Slashdot's resident lawyers can come up with some fancy polysyllabic Latin verbiage to exactly describe this non-problem, but for now you'll all have to grasp this concept without it having any specific title.)

      • by gclef (96311) on Friday June 13, 2008 @04:34PM (#23784353)
        postman hoc, propter hoc?

        • by dreamword (197858) on Friday June 13, 2008 @04:51PM (#23784611) Homepage
          I like it!

          But actually, it doesn't have a fancy latin name: it's just called "mailing of unordered merchandise". The federal statute is 39 U.S.C. 3009 [cornell.edu], and it was cited and analyzed at length in the judge's opinion (linked to from the EFF press release). The statute is designed to combat exactly this sort of scam: a company sends you something you didn't ask for, then imposes conditions on your ownership of it (like saying you can't sell it, or saying you have to pay for it).

          Joe Gratz
          (attorney for the defendant in UMG v. Augusto, but speaking here only for himself)
      • by PKFC (580410)
        So what happens if it's sent by registered mail, you sign for it and there is an EULA type document on the inside saying you agree to yadda yadda yadda by signing for this document? :P
  • by TheDarkener (198348) on Friday June 13, 2008 @03:15PM (#23783235)
    it would DEFINITELY be to the EFF. What heroes they are, in today's world!
    • by JustinOpinion (1246824) on Friday June 13, 2008 @03:25PM (#23783377)
      "If" ??

      Why don't you donate?

      Seriously, if you live in the US and you care at all about electronic freedom, then you should really do your part by helping the EFF fight the good fight. Discussing/complaining on Slashdot is great and all, but if we ever want things to change, we have to actually do something... or at least fund people who are doing something.

      I donate to the EFF yearly. You should consider doing the same [eff.org].
      • by ivan256 (17499) on Friday June 13, 2008 @03:33PM (#23783501)
        They make it really easy too. They can charge your card monthly.
        • Re: (Score:3, Interesting)

          They make it really easy too. They can charge your card monthly.
          Or, for those who aren't keen on giving a charity your personal information for fear that they will abuse it (resell it to other charities or just regularly hound you for more money), you can show up with a wad of cash at one of their offices and they'll take it no questions asked (well at least nothing personal recorded.)

          Yes, I know this from personal experience from a few years back.
      • I have donated many times.

        One time they sent me a bumper sticker I was really proud to wear (on my car); but the last time I donated, they did not.

        I need a new bumper sticker for my new (well, used) car.
      • I'm actually considering putting into my will that donations can be made to the EFF.
      • Even if you don't live in the US donating is a good idea. Before I joined the Canadian Forces, I made several donations to the EFF. American law, as the recently proposed copyright law here shows, tends to lead to extreme pressure on Canada to "conform to international (read American) standards". If the nastiness can be confined at the source, it has less chance of making it North. Pull the teeth on the American laws before they spread.
        • by ntk (974) * on Friday June 13, 2008 @07:32PM (#23786807) Homepage
          We operate internationally, including in Canada -- see http://www.eff.org/issues/international [eff.org] . A large number of EFF members live outside the US and our work reflects that (there are three of us who work on these topics full time, plus three interns currently:I'm British, our international legal director is Australian; we work at groups like WIPO and arenas like the European Parliament).

          As an aside, if there are any digital rights issues in your country that you think should get wider coverage, or need advice on how to tackle, or technical and logistical support, get in touch with me, danny@eff.org or mail info@eff.org. It really helps us to get feedback and news from our supporters.

  • And books? (Score:5, Interesting)

    by TenBrothers (995309) on Friday June 13, 2008 @03:16PM (#23783249)
    Will this then apply to books who have had their cover torn off and returned to the publisher? Most of those books carry a "if the cover is missing this book cannot be resold" blurb. Booksellers who can't sell a quantity of trade paperbacks return the front cover in lieu of the entire book for a refund. It saves on shipping and the publisher doesn't want the unsold books back anyway. So would these be considered 'gifts' to the bookseller, and presumably under this ruling also viable for resale?
    • Re:And books? (Score:5, Informative)

      by Eivind (15695) <eivindorama@gmail.com> on Friday June 13, 2008 @03:21PM (#23783313) Homepage
      Nope. The paperbacks didn't afterall, turn up unsolicited in the mail of the bookstore. (if they did, they WOULD be gifts)

      What allows the booksellers to rip and return the cover, destruct the rest of the book and get a refund is a CONTRACT they entered into with the publisher, in this contract they promised to destruct books whose cover they return. Thus if they return covers yet fail to destruct the books they're in violation of contracts, and will be held responsible for any damages arising from that.
      • Re:And books? (Score:4, Informative)

        by johnw (3725) on Friday June 13, 2008 @04:08PM (#23783985)

        What allows the booksellers to rip and return the cover, destruct the rest of the book and get a refund is a CONTRACT they entered into with the publisher, in this contract they promised to destruct books whose cover they return.
        The verb for which you are hunting in vain is *destroy*, not "destruct".

        HTH
      • by cfulmer (3166)
        Correct. And, the bookseller by ripping the covers off but not destroying the books is in breach of that contract.

        But, here's the distinction: Suppose the bookseller breaches the contract and sells the books to somebody else ("Bob") without covers. And then when Bob tries to sell the book on ebay, the publisher comes after him. We know that the publisher has a breach-of-contract claim against the original bookseller. Does he also have a copyright infringement claim against Bob for violating the distrib
      • These are subscription services. Promo Only and ERG Music Traxx are a couple that pop into my head right now. Radio Stations and mobile DJs pay a subscription fee to get these CDs that have all the current music on them rather than having to buy entire CDs for just a single track or two.

        Maybe I can put it into geek terms, well almost geek since it involves Microsoft. If you pay a yearly subscription fee to MSDN, they send you CDs with the latest versions of their software. Everything from operating syst
    • Will this then apply to books who have had their cover torn off and returned to the publisher? Most of those books carry a "if the cover is missing this book cannot be resold" blurb[?]

      Probably not. Promo records are spam. The arrangement between the publishers and the booksellers is contractual. Since the arrangement requires disposition of the remainder of the book in a way that keeps its content out of the market it can be argued that marketing the defaced book is conversion (think "stealing it for you
    • Re:And books? (Score:5, Informative)

      by vux984 (928602) on Friday June 13, 2008 @04:19PM (#23784119)
      Will this then apply to books who have had their cover torn off and returned to the publisher? Most of those books carry a "if the cover is missing this book cannot be resold" blurb. Booksellers who can't sell a quantity of trade paperbacks return the front cover in lieu of the entire book for a refund. It saves on shipping and the publisher doesn't want the unsold books back anyway. So would these be considered 'gifts' to the bookseller, and presumably under this ruling also viable for resale?

      Yes and No. Mostly No.

      Think about how that process works. You buy up a bunch of inventory. You then don't sell it and want to return it to get your money back. The publisher could just say screw you, you bought it, its your problem to sell. (And that's the case with a lot of books... and why there are those bins with hard covers for $1.00 in them.)

      But some publishers with some titles for a number of reasons, give you the option to return the book for full or partial credit if it doesn't sell within a time frame. Of course, they don't really want the book back and it costs a bundle to ship heavy books around so instead they simply require you to destroy the book and they compensate you. The whole 'tear off and send in the covers' is just part of the 'auditing and accounting processes' to ensure disreputable dealers don't just claim they destroyed them and ask for piles of money back while selling the books. Plus by tearing the covers off and having the disclaimer in the book it renders the books nearly worthless even if they aren't destroyed, because a) the cover is missing, and b) consumers know that someone got paid to destroy these books and now is trying to sell them.

      The book seller was essentially paid to destroy and discard them, if they didn't destroy them then they are in violation of their contract and liable to be sued etc. Its no different than you contract a company to come to your office to shred your documents, and then instead they take your documents and sell them on ebay, they are in serious violation of the contract. Same deal here.

      So in most cases if you came into possession of such a book it would mean that the contract was not fulfilled and the publisher could seek damages from the book seller that was supposed to have destroyed it. If you worked at a book store and just kept copies for yourself, it gets messy, those copies could legally amount to stolen, and reselling them would amount to selling stolen property. If your being paid to destroy or discard something and you keep it, the question of whether its theft or not is complicated. Normally it would be ok... like if your boss said throw that printer away and you took it home instead. But if your boss said destroy this book of customer contact and account information and you took it home instead... that would be theft.

      But here the illegality has really nothing to do with the cover being missing, or the disclaimer on the book, and everything to do with the fact that the publisher paid for these books to be destroyed and they weren't.

      HOWEVER. ALL THAT SAID.

      If you somehow legally came into possession of a book with its cover ripped off, you can sell it. You are not bound by any contract. Nor are you bound by the disclaimer on the first page about the missing cover.

      If you bought a book and then tore its cover off for example you'd still be able to sell it without question. Or if you found it on the street that would be fine.

      If you pulled it out of a dumpster that would really depend on the circumstances. It would probably be legal in most cases of simple dumpster diving... but illegal theft if it were a more systematic enterprise, especially if you were involved or related to the bookstore putting them there.

  • The judge ruled that the doctrine does apply because the discs were gifts. The labels indicate no expectation of their return

    We can now expect to see them add a little "please return this CD to us when you're finished with it" to each promo disk.

    • by j00r0m4nc3r (959816) on Friday June 13, 2008 @03:27PM (#23783407)
      I don't think even that is enforceable. If you give something to someone unsolicited it's a gift and the recipient can do whatever they want with it regardless of whatever BS sticker it attached to it. I mean, why not put a sticker on it that says "Return after 30 days, along with $1000"?
    • by rob1980 (941751)
      That, or "please return this CD to us when the album is released" - otherwise everybody will just not "finish" using the CD. :)
      • by uniquename72 (1169497) on Friday June 13, 2008 @03:46PM (#23783689)
        Often, these promotional copies aren't sent out until AFTER release. When I was a lowly music store manager, labels fell all over themselves to shower me and my staff with promotional copies of just about anything that came out. This accomplished 3 things from the labels perspective:
        1. We'd use the CDs for in-store play, thus generating customer interest.
        2. Word of mouth advertising from our employees.
        3. Often, in exchange for free copies of the CDs, we'd let a label representative make a small in-store display of that or other recent/new/upcoming releases from that label.
        I left that job with thousands of discs, which I sold at used stores for $1-$4 a piece -- nice severance package, if you can get it.

        It's always struck me as funny that record companies get pissed about free music being available online, when they happily send music stores multiple free copies of nearly every new CD that comes out. I've often wondered how many tens of thousands of free copies of each major release get sent out. (I understand the logic -- quid pro quo and all that -- but it's still a strange practice.)
        • Re: (Score:3, Interesting)

          by Znork (31774)
          It's always struck me as funny that record companies get pissed about free music being available online

          Because they need someone to pay for all the free copies they send to the stores. It's not that strange really, it gets put in the 'marketing' budget, probably costs more money than they give to the actual artists (if it isnt just outright deducted from the artists part of the revenue), and then they can whine about how expensive it is to produce and distribute music.

          Of course, this kind of waste only make
    • Already happens. (Score:2, Informative)

      by igorthefiend (831721)
      They already do. I have a number of promotional CDs which explicitly state "This CD remains the property of MUSICCOMPANY and we can request that you return it at any time." In practical terms, they never actually do ask for it back, but presumably it gives them the option.
    • by Knara (9377)

      They can't. There's established law that unsolicited deliveries of items are legally gifts and don't need to be paid for or returned.

  • There goes promotional copies of CDs that reviewers keep, I guess.
    • by Ungrounded Lightning (62228) on Friday June 13, 2008 @03:25PM (#23783379) Journal
      There goes promotional copies of CDs that reviewers keep, I guess.

      Not if they want a good review. B-)
    • The promoters don't have much choice. Either they:
      • Send unsolicited promotional copies to various parties. But unsolicited merchandise through the mail [usps.com] is presumptively a gift. So the people will then own the promotional copy, and have the right (as this recent ruling affirms) to resell the item. It would be fraudulent to mail things that say "you must pay for this!" or even "you must return this!" (thereby forcing people to pay postage for things they never requested).
      • First send out a letter asking the r
      • Get congress to "fix" the law so that they can send promo copies which are not presumed to be gifts.

        Yay!
      • by FLEB (312391)
        Really, the "contract" isn't as much of a hassle as you make it out to be. All it has to be is a one-liner in any other sort of "sign-up" or agreement saying that you want to sign up for promos but won't sell them.
        • by fwarren (579763)

          Really, the "contract" isn't as much of a hassle as you make it out to be. All it has to be is a one-liner in any other sort of "sign-up" or agreement saying that you want to sign up for promos but won't sell them.

          But remember, those who get air play are those who had their promo heard. Those who had their promo herd, are those who sent it out unsolicited. If they ask for any level of commitment they will lose business to those who don't ask. Thus everyone in the business would like to have the thing singed, but would like everyone else to be doing it before they come on board. It ain't going to happen.

  • by CogDissident (951207) on Friday June 13, 2008 @03:18PM (#23783279)
    I'm actually a bit sad that the EFF won on this case. Because if it hadn't of been overturned, you could label "anything" as no-resale and send it to someone. Like, you know, that giant pile of bricks or the entire output of a nuclear reactor and mail it to the RIAA.

    Because, with the policy they were trying to establish precedent for, you could do so, mark it as no-sale and no-disposal, and force them to build warehouses to store the random crap you send them.
    • by Paranatural (661514) on Friday June 13, 2008 @03:29PM (#23783433)
      As fun as that would be, I could see a few problems with it:

      1) I'd lose my job - The warehouse would start to question why I always had my Jeep full of boxes and barrels to ship out to CA, and would complain about the shipping charges.

      2) I'd be arrested - After plundering every Goodwill dropoff area (a.k.a. 'Round back') for weeks on end for used underwear and rugs that have seen more cat urine than most litter boxes.

      3) The ASPCA would track me down - After stealing several monkeys, which I would train to fill buckets full of monkey semen to send to the offices of the lawyers for the RIAA. Imagine hundreds of barrels of monkey semen, all no-resale and no-disposal. Think about it.

      I am.

      And I need a bucket.
    • entire Waste output
      • by Chrontius (654879)
        They can also have the rest of the output, in the form of a high-energy (frickin') laser beam.
    • by Sta7ic (819090)
      I'm not sure if the EPA, DOE, or USPS would slap you harder for sending radioactive waste through the mail, but it'd be pretty funny to see. I hear the USPS spooks mean business, and even the ninjas wake up in a cold sweat after USPS spook nightmares.
    • by Thelasko (1196535)

      Because if it hadn't of been overturned, you could label "anything" as no-resale and send it to someone.
      Nope, adverse possession [wikipedia.org] applies to real property. If it's real property and not imaginary property, it becomes theirs after a specified period of time. They can then do whatever they want with it.
    • by fwarren (579763)

      I'm actually a bit sad that the EFF won on this case. Because if it hadn't of been overturned, you could label "anything" as no-resale and send it to someone. Like, you know, that giant pile of bricks or the entire output of a nuclear reactor and mail it to the RIAA.

      Since they have not asked for it, you can still send all of those things to the RIAA as a gift.

  • Good news (Score:4, Informative)

    by Anita Coney (648748) on Friday June 13, 2008 @03:19PM (#23783291) Homepage
    I used to work at a music store in my youth and selling promo CDs is what got me through college.
    • That's funny -- buying used promo CDs (3 for $5) in the small local music store is how I got most of my music in college.

      Did you work in Hoboken by any chance?
  • by Thelasko (1196535) on Friday June 13, 2008 @03:23PM (#23783351) Journal
    I worked at my high school's radio station. We received tons of promo CD's. Very few of them turned out to be hits. We had stockpiles of CD's nobody wanted. They just piled up for years. We were always worried that the record companies were going to ask for them back, so we had to keep them.

    Ultimately, we decided that the record companies weren't going to ask for the really old ones, so we gave away as many as we could, and threw the rest away. It was kinda sad to see all of that waste.
  • What? (Score:5, Funny)

    by liquidpele (663430) on Friday June 13, 2008 @03:25PM (#23783387) Journal
    The RIAA didn't walk away from the case and then try to re-sue using a different judge this time?
  • by seanadams.com (463190) * on Friday June 13, 2008 @04:02PM (#23783893) Homepage
    OK, so common sense prevailed and the EFF won. That's great, but what is the significance of this case? Is there actually a big problem with people getting hassled for giving/selling promo CDs, or am I missing some other broader implication as a result of this decision?
    • Is there actually a big problem with people getting hassled for giving/selling promo CDs, or am I missing some other broader implication as a result of this decision?

      This decision affirms a principle that most of us would consider self-evident: if you give something away, you can no longer claim to own it.
    • by LehiNephi (695428)
      You're right that this particular case does not seem to affect many people. I think this is more of a "Woohoo! The RIAA lost a stupid lawsuit!" story.

      Nevertheless, there are some broader, less obvious implications. Besides the illegality of sending someone something in the mail and then demanding it back, it can be seen as supporting the first-sale doctrine. Some also see it as a step towards the eventual invalidation of shrink-wrap licenses, but I think it's a bit early and far-removed to take it tha
      • by yuna49 (905461)
        it can be seen as supporting the first-sale doctrine

        That's exactly why this decision is an important one. Content owners want to shrink the first-sale exemption through one-way "licensing" schemes like the one struck down here. They want the right to distribute their works as they see fit but not relinquish control over the copies as the law requires.
      • it can be seen as supporting the first-sale doctrine.

        No, it can't. There's only a tangential relationship to DFS here, which itself is fairly uncontroversial. The only issue is the unsolicited mailing-out of discs and then expecting someone to honor a restriction you placed on a note attached to it.

        This has nothing to do with something a consumer initiates by an intentional purchase, nor does it have any bearing on "not for resale" labeling in solicited purchases or acquisitions. It really is just a case reminding people that conditional gifts have to be

  • I'm all for fair use, but I think the judge went a bit too far. After all, the intended purpose of the disks seems pretty clear and promoting disincentives for record labels to distribute music for FREE to radio stations benefits no one except corrupt DJ. Fuck you, Tony.
  • im gonna put your banners on all my sites and have your children !

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