This story has been updated. Original CopyCense coverage: March 16, 2006

“A new online music service called La La Media aims to offer full-length CDs for $1 by letting users trade discs, in a bid to avoid legal pitfalls that face online song trading.

“Backed with $9 million in funding by Bain Capital and Ignition Partners, La La works like an online music co-op by enabling members to trade physical CDs they own for physical CDs they want, Bill Nguyen, co-founder of La La, said ahead of the Tuesday announcement.

“With 1.8 million album titles available, members trade the CDs in prepaid envelopes, much like the way popular mail-order DVD service Netflix operates.”

Reuters. CD-Swap Network to Slip Through Copyright Loophole? News.com. March 7, 2006.

Related Stories & Documents:

• The Patry Copyright Blog. La La and Section 109. March 8, 2006.

Updates:

• Reuters. New CD Swap Site to Give Back To Artists. News.com. June 7, 2006.

CopyCense™: The law, business, and technology of digital content. A business venture of Seso Digital LLC.

“For a 41-year-old investment portfolio manager in Manhattan, the Web site with the whimsical name made perfect sense. Like many Americans, she found herself awash in CD’s, DVD’s and VHS tapes that were seldom if ever played anymore. They just took up valuable space in the Upper West Side apartment where she lives with her husband and two young children.

“Then a friend of a friend told her about Zunafish, a new Web site that matches people with discs and tapes to trade — and video games and paperback books, too. The site, which looks remarkably similar to a prototype Mr. Bloom sketched on notebook paper four years ago with Mr. Elias, trades only one-for-one items within the same category — CD’s, DVD’s, VHS tapes, video games, audio books or paperback books. No item is worth more than any another.

“Traders using the site determine the relative value of an item by choosing to swap or not. No one is ever forced to make a trade.”

Michel Marriott. Read It? Watched It? Swap It. The New York Times. April 13, 2006.

CopyCense™: K. Matthew Dames on the law, business, and technology of digital content. A business venture of Seso Digital LLC.

“While the Canadian Recording Industry Association (CRIA) regularly trumpets commissioned studies as evidence for the problems posed by P2P, this week it released a major study without any fanfare whatsoever. What makes this particular study interesting is that much of the data challenges many familiar CRIA claims.

“The survey asked for the sources of music on people’s computers. Among those who download music from P2P services, the top source of music was ripping copies of their own CDs (36.4%), followed by P2P downloads (32.6%), paid downloads (20.1%), shared music from friends (8.8%), downloads from artist sites (5.6%), and other sources (2.9%). In other words, even among those who download music from P2P services, the music acquired on those services account for only one-third of the music on their computers as store-bought CDs remain the single largest source of music for downloaders.”

Michael Geist. CRIA’s Own Study Counters P2P Claims. March 17, 2006.

CopyCense™: K. Matthew Dames on the law, business, and technology of digital content. A business venture of Seso Digital LLC.

“It’s a modern dilemma: That iPod you got last year seems so lame now that a newer version is out. If you’re the type that needs to switch up MP3 players like you change sneakers, one of the easiest ways to unload the devices is by selling them on Web.

“But given all the lawsuits over illegally traded music, you might ask yourself, ‘Is it legal to sell a device loaded with your signature mix of tunes?’”

“The Recording Industry Association of America — the lobbying group behind the thousands of lawsuits over unauthorized sharing and downloading of songs — says the answer is definitely no. ‘Selling an iPod preloaded with music is no different than selling a DVD onto which you have burned your entire music collection,’ the RIAA said in a statement. ‘Either act is a clear violation of U.S. copyright law. The RIAA is monitoring this means of infringement. In short: seller beware.’”

Gil Kaufman. Thinking About Selling Your Used Ipod? Not So Fast, Says RIAA. MTV News. Feb. 9, 2006.

See also:

Fred Reed. Music Industry Souring on IPod. Washington Times. Feb. 18, 2006.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.

“It is no secret that the entertainment oligopolists are not happy about space-shifting and format-shifting. But surely ripping your own CDs to your own iPod passes muster, right? In fact, didn’t they admit as much in front of the Supreme Court during the MGM v. Grokster argument last year?

“Apparently not.”

EFF Deep Links. RIAA Says Ripping CDs to Your iPod is NOT Fair Use. Feb. 15, 2006.

See also:

U.S. Copyright Office. Exemption to Prohibition on Circumvention of Copyright Protection Systems for Access Control Technologies — Joint Reply of Association of American Publishers, et al. (.pdf, 550 KB) Feb. 2, 2006.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.

A. INTRODUCTION

This edition of CommuniK.™ features the third part of a series about copyright law exceptions that are available to libraries, schools, and archives. The article discusses Section 109(a) of the 1976 Copyright Act, otherwise known as the “first sale” doctrine. Generally, “first sale” allows anyone who rightfully and legal owns a copy of a protected work to resell, rent, or lend that copy to another person or entity. Many businesses — including libraries, used bookstores, used music and video resellers, and video rental stores — are able to conduct their operations legally because of the “first sale” doctrine.

Over the last decade, however, several changes have occurred that threaten first sale’s future viability. First, manufacturers increasingly are distributing content in digital formats, rather than analog formats. Second, digital content is being distributed as sheer content, rather than being wrapped in some media such as a disc or book. Third, digital content typically is not sold to consumers; instead, it is leased to consumers, with a license governing the terms and conditions of content use and access. Often, the copyright owner uses the license to reserve certain critical legal rights, and to curtail privileges that the consumer normally would enjoy under federal copyright law. Together, these changes have rendered “first sale” nearly irrelevant.

Still, it is important to recognize what the “first sale” doctrine says and how it applies. With such knowledge, a savvy information professional can recognize if the doctrine applies and whether a contract or other arrangement eliminates this limitation.

This article analyzes the traditional role of “first sale,” how digital technology and business practices have eroded its viability, and how information professionals can continue to leverage “first sale” to their advantage.

Portions of this article originally appeared in the May/June 2005 edition of Online magazine.

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“A tiny Massachusetts company named TVMyPod is selling iPods that come with movies and TV programs already loaded on them, a practice that raises questions of legality as it addresses consumer demand for convenience and portability.

“Customers choose any content currently available on a DVD and which iPod they want. TVMyPod then puts the content on the player and ships the original DVDs along with the iPod restored to its original packaging.”

Reuters. TVMyPod Ventures Into Copyright Gray Area. News.com. Jan. 20, 2006.

See also:

Chris Marlowe. IPods Pre-Loaded With Video Tread Legal Gray Zone. Yahoo! News. Jan 20, 2006.

Update:

Kevin Maney. Preloaded iPods Prompt Legal Ponderings. USA Today. Jan. 24, 2006.

Editor’s Note: CopyCense’s K. Matthew Dames has written a comprehensive article on the first sale doctrine. That article, “First Sale in the Digital Age,” appears in the Monday, Jan. 23 edition of CopyCense.

CopyCense™: K. Matthew Dames on the intersection of business, law and technology. A business venture of Seso Digital LLC.