April 8, 2008 | By Fred von Lohmann

UMG Says Throwing Away Promo CDs is Illegal

In a brief filed in federal court yesterday, Universal Music Group (UMG) states that, when it comes to the millions of promotional CDs ("promo CDs") that it has sent out to music reviewers, radio stations, DJs, and other music industry insiders, throwing them away is "an unauthorized distribution" that violates copyright law. Yes, you read that right -- if you've ever received a promo CD from UMG, and you don't still have it, UMG thinks you're a pirate.

This revelation came in a brief for summary judgment filed by UMG against Troy Augusto. Augusto (aka Roast Beast Music Collectibles, eBay handle roastbeastmusic) buys collectible promo CDs at used record stores around Los Angeles and resells them on eBay. UMG sued him last year, claiming that the "promotional use only" labels on the CDs mean that UMG owns them forever and that any resale infringes copyright. EFF took Augusto's case to fight for the proposition that a copyright owner can't take away a consumer's first sale rights just by putting a label on a CD (after all, the Supreme Court first recognized the first sale doctrine when a book publisher tried the same thing with a label stating "may not be sold for less than one dollar," and we've seen patent owners trying the same trick on printer cartridges). In other words, EFF believes that if you bought it, or if someone gave it to you, you own it.

UMG seems to think that the "promotional use only" label somehow gives it "eternal ownership" over the CD. While this might make sense to a goblin living in Harry Potter's world, it's not the law under the Copyright Act. According to the first sale doctrine, once a copyright owner has parted with ownership of a CD, book, or DVD, whether by sale, gift, or other disposition, they may not control further dispositions of that particular copy (including throwing it away). It's thanks to the first sale doctrine that libraries can lend books, video rental stores can rent DVDs, and you can give a CD to a friend for their birthday. It's also the reason you can throw away any CD that you own.

For EFF's view of the reality of "promo CDs," and why it's absurd for UMG to claim to still own them, years after they mailed them out and deleted all records of who they were sent to, read our summary judgment brief on behalf of Augusto, also filed yesterday.


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