Federal judge rules that used digital items cannot be sold by consumers

Start-up company ReDigi plans to allow users to sell used e-books despite being told by a federal judge that selling used music is illegal.

Mark Lennihan/AP
Selling a used e-book could be viewed as making an illegal digital copy of it.

Finished with that digital copy of “The Help” on your Kindle and hoping to sell it somewhere else? 

Sorry – e-books being sold used may not be legal just yet.

ReDigi, a start-up based in Massachusetts which allows users to resell digital music on their site, was told by a federal judge that Capitol Records' rights are violated by such a practice. The company is planning to allow consumers to sell used e-books this summer. ReDigi has been in existence since 2011 and was planning an overhaul late this summer to begin emphasizing e-book content. 

However, Judge Richard Sullivan told ReDigi that it has been violating the rights of Capitol Records by allowing digital music to be resold.

According to the law, e-books are considered an original version of the author’s work. If you’ve already bought a version and then sell it to someone else, you’re making an illegal copy of the original work (the text you downloaded).

By contrast, according to the law, if you sell a used print book to your friend, you’re not making another copy of it, so you’re not going against the author’s copyright.

ReDigi says it believes that by taking a user’s copy of an e-book, putting a watermark on the file, keeping the e-books in the cloud, and selling the right to ownership of the files, it is proceeding according to the law.

According to founder John Ossenmacher, the company still plans to begin its e-book program. He told CNBC Sullivan’s decision about music applies to an earlier version of the ReDigi software and that the company now has new software that complies with the judge’s concerns. The company plans to appeal Sullivan’s decision. Capitol Records did not return CNBC’s request for comment.

According to ReDigi, the new software requires a user to give up the rights to a file when it is sold, and the program checks the seller's computer to make sure there is no hidden copy of the song or album.

In addition, a judge in Germany recently ruled that e-books could not be sold used.

Will legal used e-books ever be a reality? They could be – Amazon recently secured a patent for a “secondary market for digital objects.”

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