UMG v. Augusto

Appellee's Brief


In May 2007, UMG sued Roast Beast Music for auctioning "promo CDs" on eBay, CDs which Roast Beast Music had itself purchased from used record stores around Los Angeles. Apparently, UMG had been harassing a number of eBay sellers, sending bogus DMCA takedown notices to eBay, getting auctions suspended and accounts terminated.

EFF, assisted by the San Francisco law firm of Keker & Van Nest LLP, took up the case on behalf of Roast Beast Music, answering UMG's allegations and counter-suing for the bogus DMCA takedowns. The critical question is whether UMG can trump the first sale doctrine by printing "promotional use only, not for resale" notices on the CDs that they routinely give away to radio stations, journalists, and tastemakers of all kinds. Many of these CDs then find their way into the bins of used record stores.

If UMG is right, then copyright owners of all kinds can strip away our first sale rights by putting these kinds of "label licenses" on their wares. Next thing you know, CDs, books, DVDs, and video games could be festooned with "notices" that erode a customer's first sale, fair use, and other rights. Imagine, for example, books "for personal use only, not for library lending" or DVDs that say "not for rental for less than $1 per day."

Fortunately, UMG lost. In June 2008, the district court dismissed UMG's copyright claims, finding that the initial recipients of "promo CDs" own them, notwithstanding "not for resale" labels. The court rejected the notion that these labels create a "license" or that "promo CDs" are "loaned" by the record labels, and instead concluded that the CDs are gifts. According to the opinion, "UMG gives the Promo CDs to music industry insiders, never to be returned. ... Nor does the licensing label require the recipient to provide UMG with any benefit to retain possession."

UMG has appealed the decision to the Ninth Circuit.

This is the Appellee's Brief on Appeal.

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Reference Info:Appellate Brief | Federal, 9th Circuit | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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