A federal court ruled this past weekend that ReDigi was engaging in copyright infringement by selling “used” iTunes tracks, saying the “music locker” could not use the first sale defense to justify selling consumers’ iTunes downloads.

ReDigi facilitates sales of iTunes music by copying customers’ tracks into a cloud-based “locker.” When someone purchases a track, the song is transferred to the new owner’s locker and wiped from the customer’s locker and computer. ReDigi takes a 60% cut of all sales.

But the federal judge said in the legal case brought by Capital Records, that ReDigi’s first sale defense — which allows consumers to sell used products — is not applicable because the songs were obtained illegally by copying — there was no direct sale to ReDigi by the music owners.

The crux of the ruling seems to rest on ReDigi’s copying methodology, making digital rights management even more complex. In theory, consumers could have sold their music to ReDigi for a fixed price, eradicated it from their computer at that time, and then ReDigi could have re-sold it, without any copyright infringement.

At the same time, consumers could easily copy their music to CDs or flash drives before the sale, so it’s unclear if the copying argument is adequate digital rights protection.

Fortunately, we will have legal expert Richard Eisert speaking about just such legal nuances at Subscription Site Summit.

Image (c) Phil Roeder via flickr.