Record Industry Takes Aim at Right of 'First Sale'

San Francisco - An eBay seller is taking on Universal Music Group (UMG) in court after the record industry giant targeted his online music sales with false claims of copyright infringement.

The Electronic Frontier Foundation (EFF) and the San Francisco law firm of Keker &amp Van Nest LLP are representing Troy Augusto, whose online auctions included sales of promotional CDs distributed by Universal. Augusto does business on eBay under the name Roast Beast Music and specializes in sales of rare and collectible music.

Copyright law's "first sale" doctrine makes it clear that the owner of a CD is entitled to resell it without the permission of the copyright holder. Nevertheless, Universal demanded that eBay take down Augusto's auctions, claiming that CDs marked as "promotional use only" remain the property of Universal and thus can never be resold.

"When a consumer buys a CD, he gets certain rights, including the right to resell it. Universal is mistaken if it thinks that it can trump these rights simply by putting a label on a CD," said Fred von Lohmann, EFF Senior Intellectual Property Attorney. "Universal is trying to unilaterally rewrite copyright law to the detriment of Augusto's legitimate business and the public. Unless this effort is blocked, it could jeopardize not only sales of used CDs, but also libraries, used bookstores, and businesses that rent movies and video games."

In May, Universal filed a copyright infringement lawsuit against Augusto. Today, EFF filed papers with the federal court in Los Angeles answering Universal's claims and counter-suing the company for sending bogus "takedown notices" to eBay that resulted in the unwarranted suspension of Augusto's auctions.

This is not the first instance of Universal and its affiliated companies abusing copyright law. Last month, EFF filed suit against Universal Music Publishing Group on behalf of a mom who had a home video yanked from YouTube because a snippet of a Prince song could be heard in the background. In May, UMG made baseless copyright complaints about a video podcast by political blogger Michelle Malkin.

EFF has also fought other efforts to override the first sale doctrine, arguing in 2004 that Lexmark should not be permitted to use a "label license" to prohibit the resale of laser printer toner cartridges.

For the answer and counterclaim:

For more on this case:


Fred von Lohmann
Senior Intellectual Property Attorney
Electronic Frontier Foundation

Corynne McSherry
Staff Attorney
Electronic Frontier Foundation

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