Record label EMI have launched a legal battle against a startup business which is reselling MP3s.
ReDigi, which opened last year, offers fans the opportunity to sell on downloads they've paid for but no longer want. Tracks usually on sale for $1.29 can be found for 59c on their website.
But Capitol Records, a US division of the giant label, believes it's nothing more than piracy, and have applied to the courts to have ReDigi shut down.
Larry Rudolph, the fledgling firm's CTO (Chief Technology Oficer), believes the case will strike at the heart of the legal concept of ownership particularly US copyright law, which states that anyone who buys a creative work can resell the copy they bought.
Rudolph tells Technology Review: "You buy it, you own it. You should be able to sell it. If you steal it, you shouldn't be able to sell it. It's very simple."
But Capitol say the company is nothing more than "a clearing-house for copyright infringement," insisting: "While ReDigi touts its service as the equivalent of a used record store, that analogy is inapplicable. Used record stores do not make copies to fill up their shelves."
ReDigi software verifies whether an MP3 was purchased fair and square before presenting users with the option to sell it on. If the system flags any doubt regarding a track, they will not offer to resell it. Once the data has been transferred, ReDigi then deletes all copies from the previous owner's computer system. It only offers a track for sale when it has completed that routine if one person has made a transaction for a particular song, then only one copy of the song will be available for second-hand purchase.
It's thought the argument will focus on whether a copy of a song is made when ReDigi transfer the file to their server, and whether a track originally downloaded from an online store constitutes a transfer of ownership of that copy of data.
Digital copyright executive Jason Schultz believes the firm could win the case based on current copyright law. He adds: "It strikes at the heart of the future business model of creative industries.
Are we shifting to a world where every single time you want to use some copyrighted content or media you have to pay, like on a toll road? Or do you actually own something, and you decide how you want to use it?"
Thanks to Classicrockmagazine for the report.