Court Rules Selling Promo CDs Doesn’t Constitute Copyright Infringement

In June, a District Court Judge in San Francisco dismissed a suit by Universal Music Group against Troy Augusto, a man who had been selling promotional copies of UMG CDs on eBay. The attorneys for Universal, which has produced recordings for artists such as 50 Cent, Elvis Costello, and Melissa Etheridge, argued that by ignoring the labels that designated the CDs as “personal use only, not for resale”, Augusto was infringing on the recording giant’s copyright.

The court, however, sided with Augusto and ruled that his actions were protected under the first sale doctrine, which states that once copyrighted material has been sold or given as a gift to a consumer, the consumer has the right to sell it, give it away to another person, or even destroy it. A promotional CD, even one labeled “not for resale,” constitutes a gift and therefore the court ruled that Mr. Augusto could do with it whatever he pleased.