I haven’t bothered to post about these issues because others have gotten to them quicker and better than I could, but that doesn’t mean you shouldn’t find them. Donna has all the goods on the recent court decision putting the “limited times” clause into effect and nicely dealing with the copyright v. commerce clause issues, as well as the push behind a new Induce Act draft. Ernest, of course, will follow-up with more soon on what’s been dubbed Induce 2.0.
Robert Young, having tracked previous posts about digital first sale, pointed me to Ongo Bongo. Apparently, the company is a CD rental service. The exact scope is a little unclear from the website, which only mentions this service while noting in the FAQ that no such service exists yet. However, other sources have reported that the company will operate much like Netflix. (I couldn’t find any of that language on the site, but perhaps I just missed something in my quick look.)
Unless they have a license from the sound recording copyright owners (that is, the record labels), a CD rental service of this sort is clearly infringing. As I have discussed, the first sale doctrine is an exception to the exclusive right to distribute and generally allows people to sell, rent, loan, or give away lawfully made copies of copyrighted content; once Netflix buys the copy of the DVD, they can distribute that copy to others without it infringing the copyright. However, a few exceptions to first sale apply. The owner of a particular sound recording copy (a phonorecord) may not:
“for the purposes of direct or indirect commercial advantage, dispose of, or authorize the disposal of, the possession of that phonorecord … by rental, lease, or lending, or by any other act or practice in the nature of rental, lease, or lending. Nothing in the preceding sentence shall apply to the rental, lease, or lending of a phonorecord for nonprofit purposes by a nonprofit library or nonprofit educational institution.”
So there you have it. First sale doesn’t cover music rental. I’m not sure what other sort of defense you could use. If Ongo Bongo is actually going through with this service, they better have a license.