Thinking About Selling Your Used Ipod? Not So Fast, Says RIAA

Resale of music on iPods opens up complex web of legal issues.

It's a modern dilemma: That iPod you got last year seems so lame now that a newer version is out. If you're the type that needs to switch up MP3 players like you change sneakers, one of the easiest ways to unload the devices is by selling them on Web sites like eBay or Craigslist.

But given all the lawsuits over illegally traded music, you might ask yourself, "Is it legal to sell a device loaded with your signature mix of tunes?"

The Recording Industry Association of America — the lobbying group behind the thousands of lawsuits over unauthorized sharing and downloading of songs — says the answer is definitely no. "Selling an iPod preloaded with music is no different than selling a DVD onto which you have burned your entire music collection," the RIAA said in a statement. "Either act is a clear violation of U.S. copyright law. The RIAA is monitoring this means of infringement. In short: seller beware."

That hasn't stopped people from unloading their iPods online, though. A recent search on both Craigslist and eBay revealed dozens of sellers offering used iPods loaded with thousands of songs for anywhere from $95 (for a 10 GB) to $200 (20 GB). While none of the sellers we contacted for comment got back to us, we were able to reach Andrew Bridges, a lawyer who specializes in copyright and trademark law and who is one of eBay's many attorneys. Bridges cut his legal teeth defending the makers of the early Rio MP3 player in a fierce lawsuit from the RIAA that paved the way for iPods to exist, and according to him, the answer isn't easy.

"It really depends on the individual circumstances," he explained. "I'm not sure the law is settled. If I'm a college student and I want to supplement my income by buying 100 iPods and taking my CD collection and putting it on those iPods and selling them at a significant premium, that's probably not going to fly. But if I've had my iPod Shuffle for two years and I'm tired of it and I go out and buy a 60 gig video iPod and want to sell my old Shuffle, but don't want to purge the music first, that's probably legal."

At present, there is no case that Bridges is aware of that deals with this issue, but he said the law is a bit fuzzy in this particular case. "Normally, only a copyright holder has the right to distribute copies of a work," he said.

"There is very clear provision in the statute that says that if you are in possession of a copy that has been lawfully made, you can distribute that copy without violating the copyright holder's copyright. That seems to suggest that there shouldn't be a case against a casual user disposing of copies they made for personal use when one is getting rid of one's own iPod."

Not exactly, says RIAA President Cary Sherman. "Both cases Andrew cites are different types of infringement, it's just that the damages are higher for someone engaged in it for commercial benefit versus someone who isn't," he said. "Unlawful reproduction or distribution is infringement. There is no fair use when someone is getting a complete copy of a work, especially a creative work and especially when it could have an adverse impact on the marketplace for selling or licensing that work."

Sherman said if only a handful of people were selling preloaded used iPods online it would be one thing, but given the expanding nature of the trade, he said the RIAA is planning an educational effort to alert people to the illegality of the practice. "When you buy a CD, you have it for personal use on your computer or iPod, but you can't give it away and keep it for yourself. That's having your cake and eating it too. If everyone did that, [record labels] would only sell one CD," he said.

The RIAA has already contacted eBay about a seller who was hawking video iPods loaded with 6,000 songs, and it is working with eBay on a system where people who put loaded iPods up for sale will receive a warning. Because it is an open marketplace and doesn't vet every item posted on the site, eBay does not have a blanket ban on the sale of iPods with preloaded music.

Also raising questions is the sale of new iPods with preloaded content. Boston's TVMyPod sells video iPods preloaded with DVD content customers have already purchased. The company's 24-year-old founder, Vijay Raghavan, said his business model doesn't run afoul of the Digital Millennium Copyright Act because it does not decrypt the DVDs in order to load them and because the purchaser gets the original and the copy, the business is safe under fair use provisions of the U.S. Copyright Act.

Another company, New York's RipDigital, will rip your CDs for you at $1 a piece (or slightly more for a higher-quality lossless conversion) and load the music onto any digital music device you purchase from them.

Are these services legal? RipDigital owner Richard Adams said he consulted with a lawyer before launching his business two years ago, and he reached out to "major players" in the music business to make sure they knew he was running a legitimate operation.

"Our legality hinges on us acting as an agent for the consumer to do something they are permitted to do at home, which is make a copy," he said. "It hinges on them retaining title to their CDs."

When it comes to companies like these, Sherman said the RIAA is in a quandary. On the one hand, they're not, technically, allowed to do what they're doing without a license. However, no such license currently exists.

"The law is clear in that you can't create a business in which you exercise someone else's fair use privilege without a license," he said. And though there isn't a simple way for someone to get a blanket license from the music industry, Sherman said the RIAA is working on it.

So for now, if you plan on unloading your old MP3 player, you'll probably want to unload the songs from it first.

For complete digital music coverage, check out the Digital Music Reports.

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