A key copyright case involving the right of consumers to resell their legally acquired digital media is poised to go forward on appeal after the Second Circuit late last week granted a motion to expedite oral arguments in Capitol Records vs. ReDigi. At press time a hearing date had not been announced.
The order comes just three weeks after ReDigi lawyers, on May 1, argued that Capitol attorneys were attempting to “sabotage” ReDigi’s ability to litigate its appeal by asking a bankruptcy court to convert the company from a Chapter 11 reorganization to a Chapter 7 liquidation.
In a filing last week, ReDigi attorneys, citing the Second Circuit's order to expedite, asked the bankruptcy court to delay a hearing on Capitol’s Motion to Convert because oral arguments on the underlying copyright case could now happen "as early as this summer."
The Second Circuit's order was issued by a judge well known to the publishing industry—Denny Chin, the judge who presided over the litigation arising from Google’s library book scanning program.
The ReDigi case involves a thorny copyright question for the digital age: should consumers have the right to resell their lawfully acquired digital media, as they are entitled to do with physical media, under a section of the Copyright Act known as the doctrine of first sale? In a 2013 ruling, federal judge Richard Sullivan said no, concluding that the first sale defense “is limited to material items, like records, that the copyright owner put into the stream of commerce.”
In an amicus brief filed earlier this month, the Association of American Publishers urged the court to uphold Sullivan’s decision. AAP argues that legalizing services like ReDigi would be "catastrophic” for the publishing industry, as it would enable a secondary market for cheaper, yet indistinguishable "used" e-books to swamp the industry's primary market.