Does the Right of First Sale Still Exist?

I just posted an eBay auction for a song I bought from the iTunes music store. It should be interesting to see how this works out. I only spent $0.99 on it but I bought the song just as legally as I would a CD, so I should be able to sell it used just as legally right?

[Update 09-05-2003 2:17 PM]: Did anyone happen to grab a list of the bidders? I want to get in touch with legitimate bidders, if you were one please contact me. [OK, I got one, thanks!]

[Update 09-05-2003 8:42 AM]: Just so there wouldn’t be any hard feelings between us I decided to buy something on eBay.

[Update 09-04-2003 5:51 PM]: HTML Archive, courtesy Become The Media.

[Update 09-04-2003 3:02 PM]:
My GPG signed response:
I do not believe that my auction violates the downloadable media policy, I posted in my auction that I would not be violating it. I specifically ammended [forgot to run ispell] the auction to state that the buyer would not receive the item in question over the Internet.
Please reinstate my auction ASAP.
George Hotelling

[Update 09-04-2003 2:52 PM]:
Dear George Hotelling (me@mydomain.tld)
PLEASE READ THIS IMPORTANT EMAIL REGARDING YOUR LISTING(S)
We would like to let you know that we removed your listing(s):
2555673237 Double Dutch Bus by Devin Vasquez
for violating our Downloadable Media Policy. Please read our Downloadable Media Policy here:
http://pages.ebay.com/help/policies/downloadable.html
We have credited any associated fees to your account. We have also notified the bidders that the listing(s) was removed, and that they are not obligated to complete the transaction.
If you relist this item, or any other item that violates eBay policy, your account could be suspended.
If you believe your listing was removed in error, please let us know by replying
to this email with supporting information.
Thank you for your cooperation.
Respectfully,
Customer Support (Trust and Safety Department)
Ebay Inc.

[Update 09-04-2003 12:08 PM] I’d like to apologize to eBay user shopatbanks for erroneously canceling his bid. While trying to weed out the fake bidders, I removed him as well. He says he was committed to his bid and I thank him for trying to put his money where my mouth is. Now if I can just find the guy who bid $99 million to see if he’s legit…

[Update 09-03-2003 7:44 PM] Please don’t bid unless you are willing to pay the money. While this is an interesting auction, it is certainly not a joke – that’s the whole point. I’m fine with the winner donating directly to eBay the EFF [typo or freudian slip?], but may request some money to cover the cost of the eBay auction if it gets too out of hand and I can’t afford it. [The cost of the auction is a function of the ending price, which is why I want to see legitimate buyers only. eBay will get its cut, unless they waive auction fees when the profits go to non-profits.]

[Update 09-03-2003 4:21 PM] I have about one good idea a year. I hope this was it.

[Update 09-03-2003 11:25 AM] A very excellent comment below by Piggly Wiggly asks if I will convert the format for delivery. My answer right now is “no” because I don’t want to cloud the issue of the sale by changing the format. Also, I’d like to thank all the people posting supportive comments who realize that this is about more than a $0.99 song being over-valued on eBay.

[Update 09-03-2003 11:25 AM] I’d like to respond to a few points made by people:
1. It’s true that I’m seeking attention, but not for me personally. This is an experiment in property rights in the digital age, something that’s gotten surprisingly little attention.
2. I’ve read the iTunes agreements and found nothing denying transferability. This isn’t any more a commercial venture than selling CDs at the local music store, I’m not incorporated or even DBA. Furthermore, in case anyone thinks this is a cheap way to make a buck I will be donating all profits to the EFF.
3. When the song is successfully transferred, I will not be keeping a copy of the song. If I don’t own it I shouldn’t have a copy.

[Update 09-03-2003 10:08 AM] Right now I’ve come up with a couple ways that the transfer of ownership could take place. One is to call up Apple and ask them to do it for me, which would be an interesting call. The other way would be to give my account to the winning bidder, which doesn’t seem like a bid deal considering that I’ve only purchased one song. Still, I’d have to make sure that my credit card info was completely disassociated with the account. Or I could just create a new account and repurchase the song on that account.

271 thoughts on “Does the Right of First Sale Still Exist?

  1. Next time just post something that you have the right to sell.
    I bet there are ultra clear rules for transfer in every download service’s terms now.
    Why does everybody think that they can do whatever they want?
    Why are there cheers for someone who did something so counter to a constructive solution?

  2. What if you sold the song along with the hard drive it was downloaded on to, or even the whole system?
    Lets say you have itunes and all your music instaled on a mem card, then sell that. then the buyer runs itunes off the mem card and played the song. The song never leaves itunes, and is never copyed anywhere.

  3. I think the question is not whether the agreement made with itunes allows him to re-sell the song he bought but whether companies have a right to dictate to consumers what the product is used for. If I buy a book and want to rip out the pages for use as toilet paper then I believe I have the right to do so. If I then want to put the shit stained pages on my wall as art then I believe I have the right to do so. I personally won’t use any of these music services, (or in the future movie services/book services/insert-your-drug-of-choice-here services) until I can use, abuse, resell, give away, whatever the product that I bought. encrypted stuff is a disaster as I see it as the encryption never goes away, even when the copyright has long since expired. not only that, but with the lifespan of formats getting shorter and shorter every time I look around the writing is on the wall, IMHO. I think/hope record companies, as we see them today, are dead in the water.

  4. i realize this muddies the waters of your experiment but you could sell a piece of paper with your e-mail address on it. Then when the buyer e-mails you you transfer the song to him. It would kind of be like a coupon to get the song.

  5. Well, I’m an attorney, licensed to practice in the state of Texas and three different federal courts, and I have to agree with Chris. Dr. Davis (aka “Reality Check”) is an ass. However, I’d have gone one step further and stated that he’s a dumb ass.
    Dr. Davis, you have so completely missed the point, it’s astounding. How do you think laws and contractual agreements come to be upheld or thrown out by the courts? By people testing them. And that’s what George is trying to do. He’s testing the validity of the agreement by giving Apple the opportunity to enforce the agreement.
    Let’s take a more simple example: sodomy laws. For years in Texas and other states, sodomy was illegal. That’s right. At that time, if you liked pumping the mud-shute with your mate, you risked criminal prosecution.
    The homosexual community tried for years to get these laws removed from the books, and most states responded by reducing the penalty to a fine-only crime (along the lines of a traffic ticket). This kept the politician’s bible-thumping supporters happy, and pretty much ensured that no one would challenge the constitutionality of the law. After all, it’s far more financially sound to pay a $30 fine than to appeal something all the way to the U.S. Supreme Court – which can literally cost hundreds of thousands of dollars.
    Eventually though, along came a law enforcement officer who was so blinded by the law that he couldn’t see the forest for the trees, and he arrested some ass-lovers for violating the sodomy laws. And these two took the case all the way to the U.S. Supreme Court. And the U.S. Supreme Court ruled that the Texas sodomy law was unconstitutional.
    Now, had that law enforcement officer simply looked the other way (as many, many, many others before him had), or had these two “law breakers” not had the huge cajones to take this to the mat, the law would still be valid. And mud-pumpers throughout Texas would be risking prosecution even as you read this.
    But these two ass-lovers tested the validity of the law. And they ultimately won the prize which the homosexual community in Texas had been seeking for decades.
    See how it works, Dr. Davis? You test the validity (sometimes called “constitutionality”) of a law by breaking it, going to court, losing and appealing the law’s validity.
    The same logic applies to contractual agreements. You test the validity of the agreement by breaking it, the other party sues, and you eventually get a court ruling on the validity of the agreement.
    That’s what’s going on here. Get it? Can you see it now? Could it be any more plain? He’s testing the validity of the terms of service agreement.
    Unbelievable ….

  6. I noticed a comment on /. suggesting that the file could be printed out as hex and mailed, then the buyer could use OCR to read it back onto his computer. You wouldn’t be using CDs or hard drives or memory cards, and wouldn’t be violating the recordable media policy, unless eBay considers paper to be recordable now…

  7. Gebrauchtmusik

    Da kauft jemand für US$ 0,99 einen Song über Apples neuen iTunes Music Store. Er gefällt ihm nicht so recht. Und er verkauft ihn wieder, auf ebay, genauso wie andere Leute dort ihre gebrauchten CDs verkaufen. Schließlich hat er für…

  8. “Recordable media policy”, what a joke. What about bootleg cds and dvds produced by professional piracy outfits? Ebay does nothing to prevent the sale of pirated music, video, or software so long as it’s made in Hong Kong and not in Joe Sixpack’s living room. The solution is obviously to email the file to bootleggers Hong Kong, who perform the necessary file coversion, stamp it onto a thousand cds, and package those cds in jewel cases with badly photocopied inserts. The cds can then be sent to the US, where eBay will happily allow them to be sold.

  9. Update on thay guy trying to sell itunes song on ebay

    on wensday, i posted this post about a Man who was trying to sell a song he bought off Apple Itunes for 99c. bidding actually maxed out at $100,000 according to this register article, but it has been pulled from…

  10. iTunes

    George Hotelling is pushing the envelope in digital music with his attempt to auction off a song that he purchased on Apple’s iTunes Music Store. Hotelling says he’s not concerned about recouping his 99-cent investment in Devin Vasquez’s rendition of…

  11. artists and rec industry will have to look for
    completely new biz concepts anyway.
    Reducing prices has been a good first step, but in the long run FANZ will have to become kind
    of sponsors / active supporters.
    Selling MP3s is pretty much the same as selling
    second hand records or CDs.
    So no one can stop that.
    Uli
    web62.com

  12. Your auction is quite interesting. I made a publication in a German legal newspaper last year discussing exactly the question whether the first sale doctrine is working in the context of digital delivery of music tracks. My paper focuses on the European law, but I think the result should be the same in U.S. law: In my opinion your auction was absolutely legal, the first sale doctrine is applicable in the digital context. Dr. Bernhard Knies

  13. Sorry, when I here the first time of this I asked myself: Is this guy little stupid?
    Why?
    If you buy Songs in iTunes you need an Apple-ID for this. So you must know every Song that yout buy there is only for one Person (use on 3 Macs)
    If you want to sell this Songs, you have to sell the Apple-ID with them too.
    If you do this – Ok!
    But if not, so you try to share illegal Copys of Music an sell somethin than no one else can use! So you sell crap.
    This is illegal too.
    Some things you buy today (so not only the Songs in iTunes) are a personal and you cannot easy sell this things to others.
    Do you understand this George???

  14. George!
    Beat EBay at there own game. They say it needs to be a physical sale right? Then put the iTunes song on a CD-R! Then you say that you are selling a CD-R which happens to only contain the song in question. They can’t pull the sell of a CD, right? 🙂

  15. This is really interesting. My take is that Apple has sold you the AAC file, thus you can resell that AAC file or that sequence of bits. Apple has not sold you anything other than that, so you do not have the right to sell a modified copy.

    Should you be resell it, and retain the original bits? Most people would say “no.” This is pretty much a violation of copyright law. Aside — the original artist did not create the exact sequence of bits that you received. Shouldn’t that sequence be copyright by both the artist and the encoder (Apple)?

    Should you be able to modify it and then resell it, retaining the original bits? Again, most people would say “no” if the modifications were “uninteresting” or “small”, say, recompressing it, adding silence or formatting it as an OGG file. Aside — at some point, you are can claim fair use if you take small enough pieces and modify it enough, but these are slippery slopes.

    Should you be able to resell the AAC file exactly as is, and not retain the bits? I think most people would say “yes,” but this has two problems. 1) As a society how do we enforce that people do not keep a copy? 2) In this case, the AAC file (IIRC) is “keyed” to George’s account and he would need to modify it in order to reasonably sell it.

    Finally, this is what George is trying to do: Should you be able to slightly modify the file, in a way which respects the artistic integrity of the original artist, and then destroy the original? Most people would say “yes” but if this is allowed, you might also have to allow the following less reasonable scenarios.

    Can you buy a copy of a book, scan and reprint it in another form, destroy the original, and then sell the new one? What about 100 copies?

    If you thought iTunes sucked because they sold the music as AAC files, and you though it would be better to sell them as OGG files (or MP3 files) should you be able to buy N copies from Apple, and then sell N copies of the OGG version on the Internet for twice as much?

  16. Why involve eBay at all? Seems to me you’ve achieved quite the notoriety here; just offer it to someone willing to pay for whatever amount you think is fair.
    You’ll go a lot further toward establishing the legality of reselling downloaded music; all you’ve proven with eBay is that it’s bloody easy to make eBay skittish (and that’s already public knowledge.)

  17. C. Conrad Cady – hit it right on the head and never knew it “Can you buy a copy of a book, scan and reprint it in another form, destroy the original, and then sell the new one? ” answer NO. The Right of First Sale is attached to the physical media. Selling anything other than the original is basiclly selling a derivitive work and there for not legal. The point here is that APPLE DOES NOT SELL THE SONG, they subliscense certain rights. The ability for YOU and ONLY you to use this file on up to three computer YOU Own.
    Unfortunatly the one thing not in question here is that “geoge does not own any resale rights to the song in question”. If Apples ITMS contact is valid it is obviuos he cannot sell. If it is not Apple owes him 99¢ but he still doesnt own any rights. an invalid contact would mean there was no sale…not that he magicly has rights no one ever meant him to have. Apple has Liscensed this music and does not have any ownership rights to sell him.
    if the contract is not valid he just has the equivilant of a pirated CD even if he paid for it its still illegal for him to sell it.
    So for all of you whining about ebay canceling the bid goerge is a criminal engaged in an act of fraud offering for sale and item that he does not own or possess. whether a noble experiment or a dumb idea to get attention it is just the same as me selling the Brooklyn Bridge.
    something to think about if there was an actual bidder offering over $1000 George becomes a FELON

  18. TRRosen: You are wrong! George does have the right to sell the original file he purchased – purchased to OWN as Steve Jobs says himself – as long as George does not keep a copy. There’s no two ways about it. Period! As for the Apple ID associated with the file and how the second owner would listen to the file without the first owner’s ID, well that’s another issue which there needs to be a solution for.
    Steve Jobs said himself that poeple want to OWN their digital music. If I own something I do have the right to transfer ownership to someone else – and there is nothing in Apple’s Terms and Conditions that state otherwise.

  19. Aww, eBay gets too much traffic, so they shut ya auction down.. what is the point in that?
    I think they just like screwing people over… how is that auction not legit!?!?
    Keep up the fight.

  20. TRRosen wrote: goerge is a criminal engaged in an act of fraud offering for sale and item that he does not own or possess.
    Possess? I’ll take that bet. He does possess a copy. He paid for it and has the right to use it on his computer. I see no problem with him selling it to a person. Whether or not it’s of any use to the buyer is irrelevant. Kinda like me buying a DVD that doesn’t match my region encoding. It won’t work on my DVD player, but does that mean I can’t buy it?
    Don’t let the technology cloud the issue. This is very much like buying a single, whether it be cassette, vinyl, CD, or digital. They slapped some tech on it to restrict where it can be played, but that’s it. So why should he not be allowed to sell it?
    We’re only going to see more of this folks. RIAA and MPAA doing more to restrict what we can / cannot do with the products we purchase.

  21. Wait a minute…
    http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=2554801917&category=307
    Huh?
    Why is this one okay, yet George’s isn’t? Quotes from the listing:
    ” This CD(s) is created by me from blank CD-R discs. This program is from my personal collection and has never been purchased from a commercial source. My collection has been built through trades and purchases from other Old Time Radio fans from their own private collections. It is my understanding that all material offered for sale here is in the public domain. If this is not so and you hold a legal copyright to anything offered here please send supporting information and I will remove your show from my auction/web site.”
    My point: this guy is shipping on CD/R; but George can’t? Also, his guys “private” collection is probably the same as my “private” collection, parts of which I have been known to make public from time to time….
    my $0.02.

  22. FIRST SALE DOES NOT APPLY TO DIGITAL GOODS.
    IT IS A STUPID, NOT INTERESTING TEST SEE BELOW
    Seth Greenstein, an attorney with the Washington, D.C., law firm McDermott Will & Emory, said a green paper put out by the U.S. Patent and Trademark Office in 1992 found that the first-sale doctrine does not apply to digital goods. The paper authors argued that the doctrine relates to the physical distribution of a work, but that the transfer of digital goods implies making a copy of the work–something that’s not explicitly addressed in the doctrine.
    That take was reiterated in an analysis of the applicability of the first-sale doctrine to digital goods from the U.S. Copyright Office, a study required as part of the 1998 Digital Millennium Copyright Act.
    The study examined the argument that the first-sale doctrine should apply to digital goods, as long as resellers erased their own copy of the work approximately simultaneously with the transfer of the file, a process known as “forward and delete.”
    “Proponents of expansion of the scope of (the first-sale doctrine) to include the transmission and deletion of a digital file argue that this activity is essentially identical to the transfer of a physical copy and that the similarities outweigh the differences,” the study states. “While it is true that there are similarities, we find the analogy to the physical world to be flawed and unconvincing.”

  23. Dr_Davis writes:
    “Seth Greenstein, an attorney with the Washington, D.C., law firm McDermott Will & Emory, said a green paper put out by the U.S. Patent and Trademark Office in 1992 found that the first-sale doctrine does not apply to digital goods.”
    Is this third-hand legal research? As an FYI, the USPTO does not make copyright law. It is a member of the executive that adopts policy stances towards patent prosecution. The law is made by the legislative and judicial branches. Accordingly, the USPTO’s opinion is little more valuable than Greenstein’s, which is little more valuable than yours…
    Au contraire, this is an interesting test…

  24. Trust and Safety Department

    Go George! Go! This tickles me to no end because it has the potential to cause total chaos. Big business wants to use the net for commerce but they haven’t really thought out the implications of trafficking in digital music….

  25. Just because you want it does not make it so.
    This poorly designed test just gave the big companies an idea of what to lobby for now. We have no effective lobby and get killed at this point every time.
    The tact taken against big companies by the slashdot crowd of testing their legal resolve is just plain dumb.
    You can look at the text that the copyright office wrote that was used by congress for the DCMA if you don’t believe me.
    http://www.copyright.gov/reports/studies/dmca/dmca_study.html
    An interesting test would not have 4 0r 5 serious holes, one of which prevents the items from being sold on ebay so ebay can comply with the DMCA. The other being clear rules against transfer between parties in itunes.
    We do not have a decent congressional lobby, and that is what is needed to achieve change.
    Individuals and their poorly thought out legal solutions are causing trouble, not change.

  26. Curious George

    I got a friendly email from Curious George after I responded to his request to get in touch with bidders in his recent auction. He answered a question I had about f.o.a.f. files and later complimented my weather-related theme concept….

  27. “Dr. Davis”, just because you proclaim it to be “stupid, not interesting” does not make it so. Eye of the beholder. (And for someone who proclaims this experiment to be so uninteresting, you appear to have taken quite an interest in it.)
    The quotation you cite:“Proponents of expansion of the scope of (the first-sale doctrine) to include the transmission and deletion of a digital file argue that this activity is essentially identical to the transfer of a physical copy and that the similarities outweigh the differences,” the study states. “While it is true that there are similarities, we find the analogy to the physical world to be flawed and unconvincing.”
    Things like this can be challenged. That’s part of the function of a court of law. Even law set by precedent of prior court rulings (which this is not; it’s merely a study)can be challenged and defeated.
    Open your mind.

  28. Dr. Davis is just a Troll. Probably works for the RIAA, hired to lick the sweat off the balls of the new chairman and CEO Mitch Bainwol.

  29. Explain to me what is “Interesting” about testing something that you already know the answer to?
    What is needed is a decent lobby for congress (The EFF loses ever battle they take on, so I don’t currently view them as a viable lobby group)
    If you want to resell digital works, then they need to be included in the first sale rules. Posting songs on ebay proves nothing positive and allows the music companies additional examples that prove that resale is wrong.
    Call me all the names you want, I have nothing to do with the RIAA, and I still think this is a poorly thought out way to achieve first sale rights for purchased digital works.

  30. I guess the real issue will only come to terms in a court of law, which won’t happen here unless Apple sues george over this (doubt it’ll happen). If we really want to test this, isn’t there something of a “preventative” type of suit? Where we would file against Apple to confirm we do have the right of first sale? I’d be willing to contribute some time and a couple hundred $ for this if you’re up to it george! =) Maybe with the help of the EFF?
    Faery.

  31. Right of First Sale in the Digital Age

    George Hotelling is purposely testing whether the right of first sale applies to a digital tune as it does with physical CD’s. He’s selling an iTunes song (a legitimately purchased iTunes AAC file) The ebay auction has been removed, but…

  32. well since apple has now said the auction was legal, I guess this makes what e-bay did illegal. They committed fraud by saying your auction was illegal. It’s a long shot, but you might be able to sue them now for the amount of the last highest bid ($30,000 or so last time I checked) regardless of whether that bid was a joke or not. I’m sure you could find a lawyer to take the case for free :-).
    although if you do this, remember me…I’m broke 🙂

  33. The Day the Music Died

    Fox and others have reported what people knew was coming all along. The RIAA has proved just how much of a bully it can be by filing the first 261 of what could be thousands of lawsuits against copyright infringers….

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