EFF Wins Promo CD Resale Case 252
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."
Good news (Score:4, Informative)
Re:And books? (Score:5, Informative)
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:The EFF sure taught the industry a lesson! (Score:5, Informative)
As I understand it: If it's unsolicited (and not the result of a shipping error or a fraudulent order by some third party) there is no obligation to return it, no matter what is printed on it.
What do you do with them? (Score:3, Informative)
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.
Re:If I were to donate to any tech foundation (Score:4, Informative)
Already happens. (Score:2, Informative)
Re:If I were to donate to any tech foundation (Score:2, Informative)
Re:Please return this post ... or I'll sue you! (Score:5, Informative)
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.)
Significance of this case? (Score:3, Informative)
Re:And books? (Score:4, Informative)
HTH
Re:And books? (Score:5, Informative)
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.
Exactly Wrong (Score:4, Informative)
Whatever idea you had in your head that prompted you to mail it makes no difference to the law. The recepient didn't ask you for it, you sent it anyway for whatever reason. Bing bam boom, it's theirs now. It doesn't matter if they want it or not. It doesn't matter if it's cross-promotional.
There is a way to send something to someone without sending it to the world. You contact them and say "If you agree to my conditions, I will send it to you." Then, if they agree, you send it, if they don't, you can't send it anyway and bind them to your wishes. I can't emphasize how fundamentally important that is... no one can force someone else into a contract.
Re:Please return this post ... or I'll sue you! (Score:3, Informative)
Re:The EFF sure taught the industry a lesson! (Score:5, Informative)
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)
Re:If I were to donate to any tech foundation (Score:2, Informative)
As an aside, I notice they have no legal expenses.
Re:Sheesh. (Score:5, Informative)
The whole idea of "licensing" or "leasing" music rather than selling it isn't a new one. The Victrola Company attempted all sorts of shenanigans with its records, including invalidating your right to play the record if you bought it for less than $1 [natch.net] (that's from 1906!). They attempted to back this up not only with contract law, but with patents as well. Their attempts at price-fixing via this method, both on records but even more significantly on machines, went all the way to the Supreme Court [findlaw.com] ("STRAUS v. VICTOR TALKING MACH. CO. , 243 U.S. 490").
So this is really nothing new at all. It's just the music industry playing screw-the-consumer in the same manner they have always done.
Re:The EFF sure taught the industry a lesson! (Score:2, Informative)
Re:Already happens. (Score:2, Informative)
I think they would run squarely into this issue [altlaw.org] ("you don't own this Victrola, we do, and we're just leasing it to you, so you have to do whatever we say").
It's easy to print scary notices on things; it's harder for them to actually be valid.
Re:The EFF sure taught the industry a lesson! (Score:3, Informative)
I remember the old "get 5 free, if you buy 300 more for grossly inflated prices" deal, and I think that those are legal, since you sign a contract beforehand. Scientific American has adds for a scheme like that in their mag, for the "scientific book club" or such, so its still legal.
It would be applicable if they send you a CD, and then told you need to buy 10 more, or pay for it. Unsolicited, of course.
Re:If I were to donate to any tech foundation (Score:5, Informative)
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.
Re:If I were to donate to any tech foundation (Score:5, Informative)
Profit and Loss Standard - January through December, 2006
Ordinary Income/Expense
Income
Corporation Contributions $215,229.72
Event Income 57,630.10
Foundation Grants 466,858.36
Individual Major Contributions 1,423,444.26
Interest Income 18,161.86
Litigation 430,545.00
Matching Gifts 35,426.34
Membership Income 882,710.89
Combined Federal Campaign (CFC) 10,354.40
Minor Donations 9,739.50
Honorarium/Awards 1,300.00
Fiscal Sponsorship 156,225.89
Miscellaneous Income 19.50
Total Income 3,707,645.82
Expense
Salaries & Benefits 1,865,393.06
Building Expenses 192,684.57
Corporate Insurance 35,645.71
Office Expenses 153,142.46
Membership Expenses 48,258.50
Court Filing and Fees 20,557.99
Bank & Merchant Fees 31,236.87
Consultants 82,622.52
Staff & Board Enrichment 24,150.06
Travel & Entertainment 66,092.38
EFF Events 23,216.94
Grassroots Campaigning 41,868.30
Taxes 410.00
Fiscal Sponsorship Expense 189,899.23
Total Expense 2,775,178.59
Net Ordinary Income $932,467.23
Other Income/Expense
Other Income
Unrealized Gain or Loss 108,618.85
Total Other Income 108,618.85
Net Other Income 108,618.85
Net Income $1,041,086.08
2006 was a particularly good fundraising year for us. In early 2007, we
transferred $1 million of our 2006 net income into EFF's Endowment Fund
for Digital Civil Liberties, to ensure the long term sustainability of
the organization. We do not anticipate having a similar surplus of
operating funds in 2007.
Public performance right (Score:2, Informative)
Regarding the exclusive right of public performance, that is superceded by the ASCAP, BMI, and SESAC blanket license agreements. In the case of a digital broadcast (such as satellite radio, cable radio, or Internet radio), the Section 114 and Section 112 statutory licenses also take precedence.
Such a notice applies to only the unauthorized public performance. It is essentially no different than stating "All Rights Reserved," which covers the gamut of the copyright in the sound recording and/or musical work. Radio stations and nightclubs, however, are authorized to publicly perform musical works, and hence are provided the exemption.
--Randall
Re:The EFF sure taught the industry a lesson! (Score:3, Informative)
However - to play devil's advocate, there are plenty of RIAA-affiliated acts that sound like their album was produced inside of a septic tank. The loudness war has really taken its toll on the quality of modern recordings. (In order to compete with each other for attention, they often compress the heck out of the audio, robbing it of its dynamics.)
Furthermore, there are a lot of acts [either independent or on non-RIAA labels] that are talented and do have strong production values. Some genres are better represented than others, obviously.
I'm a big fan of metal and progressive rock, and I haven't had any problem finding bands not on RIAA-affiliated labels to listen to. (The Inside Out and Magna Carta labels are very good.)
For electronica, there's Jamendo (www.jamendo.com). Not only is the electronica here as good as what you'd find on large record labels, a lot of it is better, IMHO. (It's not as dumbed down for the masses.)