Welcome to ReDigi: “The World’s First Online Marketplace For Used Digital Music.”

Yes, you read that sentence correctly. Launched in beta version last October, ReDigi markets itself as a “recycled music market place.” In reality, it’s an online digital music store that allows users to buy/sell used digital music files.

Following these three simple steps, anyone can acquire music from ReDigi. First, a user must upload a “legally acquired” music file onto the ReDigi Music Manager. Then, ReDigi copies the music file, verifies the “legality” of the file with its Verification Engine and deletes the file from the user’s computer. Finally, ReDigi makes the song available for other ReDigi users to purchase.

ReDigi claims that its technology signifies an important transition in the digital space, by providing a market for used digital music at resale value, while ensuring that “there are never two owners or copies of a single digital music file.” ReDigi also claims that it “actively supports the music community” by providing an additional revenue source for artists and labels. To date, there are over 11 million songs available through ReDigi.

So what’s the issue? Well, before I get to the potential legal issues, I’d like to discuss the practical ones. First, what is a “used” mp3 and why do I want one? Isn’t my Take Care album playing just as fresh on the first listen as it does on the 1,000^th? It’s not like my mp3s are going to start skipping or become worn out like my old CDs. Second, why would I—an avid music consumer/connoisseur—pay for a “used” mp3 when I can find a decent quality version for free (likely illegally) or purchase a guaranteed quality copy from iTunes or Amazon (legally)? Can ReDigi guarantee the quality of my newly purchased mp3? Who are the trusted sources? Remember all of those corrupted files you used to download from Napster? More importantly, what differentiates ReDigi from the now defunct peer-to-peer services Napster or Kazaa?

In my opinion, ReDigi is walking a fine line between legal music stores, like iTunes, and illegal ones, like Napster. On the one hand, ReDigi does provide a marketplace for used music and does allow consumers to make money from “bad” digital music purchases in the same way that we used to sell back CDs. On the other hand, ReDigi looks like a de-constructed peer-to-peer network, with all of the appropriate commercial elements to pique the attention of groups like the RIAA.  ReDigi hosts a server for the exchanged music, which essentially makes their users arms-length file-sharers, all while ReDigi collects money for it. The benefit of this for the RIAA is that ReDigi crowds all of the potential infringers into one place.

The RIAA has already taken a stance against ReDigi, claiming in a November 10^th cease and desist letter that the company is committing willful copyright infringement and essentially requesting that the site shut itself down. The RIAA is demanding a laundry list of action items from ReDigi: cease and desist its infringing activity; quarantine any copies on its servers, cease further distribution of ReDigi software; terminate the connection between ReDigi servers and all users; and provide an accounting of sales achieved and revenue generated from sales.

In its defense, ReDigi contends that their process is protected by the first sale doctrine. The first sale doctrine of the Copyright Act permits a purchaser to sell, lend, or give away a “particular lawfully made copy of the copyrighted work” without the authority of the copyright owner. In other words, if I purchase the new Beyoncé Live at Roseland DVD, but later decide that I don’t want it, I can sell you my copy without Beyonce’s permission. RIAA suggests that the first sale doctrine does not apply to ReDigi because the first sale does not permit an owner to make a copy of a sound recording, sell the second copy, and destroy the original. To use our earlier example, the first sale doctrine would only apply if ReDigi were selling the exact same Beyonce DVD that I uploaded.

So will ReDigi go the way of Kazaa and LimeWire or iTunes and Amazon? Well that clearly depends on who you ask, but in the least, it seems as if ReDigi may not have done its proper due diligence to anticipate the legal complications of its service. Even though law has not yet been presented with this issue—whether the first-sale doctrine protects digital files—I would put my money on RIAA, who have not only the courts, but the law on their side. But only time will tell.