In 2007, Universal Music Group sued Troy Augusto, a Los Angeles music journalist (and former Variety contributor), after he attempted to auction 26 of the company’s promotional CDs on eBay. Labels have long maintained that promo CDs are their property in perpetuity, are “loaned” and hence may not be re-sold. A federal court decided in Augusto’s favor in 2008, but UMG appealed. leading to Monday’s hearing.
The Electronic Frontier Foundation, a San Francisco-based consumer rights organization that focuses on e-commerce issues, is providing counsel for Augusto in the case; its attorney will argue that the so-called “first sale doctrine” — used an an argument in long-ago litigation involving video rentals — allows those who purchase goods to dispose of them as they see fit. Their alert about the case can be seen here.