Page last updated at 12:02 GMT, Thursday, 12 June 2008 13:02 UK

Universal loses promo CD battle

Promotional copies of LPs and CDs
Promo albums are marked in a variety of different ways

Music giant Universal Music Group has lost a court battle to stop an eBay trader from reselling promotional CDs he had bought from second hand stores.

Troy Augusto makes money by snapping up rare albums and selling them on the online auction site.

Universal accused him of copyright infringement, saying some of the items he offered were promotional copies and not authorised for sale to the public.

But a US judge ruled that Mr Augusto had the right to sell the CDs.

Universal said it planned to appeal against the ruling and was confident that it would win.

"We believe that the court's analysis is incorrect in a number of critical respects," a spokesman said.

The outcome applies only to US law, but observers say the case has been watched keenly in the UK.

The ruling comes as a UK-based DJ was arrested on suspicion of selling more than 150 pre-release albums on eBay, weeks before their official release.

If charges were brought, it is thought it would be the first case of its kind in the UK.

'Important ruling'

Dismissing the American case, US District Court Judge S James Otero said that Mr Augusto was protected by the "first sale" doctrine in copyright law.

This says that once a copyright owner gives away a copy of a CD, DVD or book, the recipient is entitled to sell it on.

This ruling affirms and protects the traditional balance between the copyright owners and the rights of the public
Corynne McSherry

Specialist music shops often sell promo albums or review copies that record labels send out to journalists and radio stations before the regular editions go on sale.

Record companies have long maintained that they continue to own these items and can ask for them back at any time.

They can be recognised by markings such as "For promotional use only" or "Not for resale", visible on the record or CD artwork and sometimes on the disc label itself.

But the judge said that such labelling did not alter the legal position.

The digital rights lobby group, the Electronic Frontier Foundation, which backed Mr Augusto said it was a "very important ruling for consumers".

"This ruling affirms and protects the traditional balance between the copyright owners and the rights of the public," said the EEF's Corynne McSherry.

Among the promotional items listed as sold by Mr Augusto, according to the legal brief, are titles of CD singles by Nelly Furtado and rap group Bone Thugs-N-Harmony.

The IFPI, which represents the recording industry internationally said that pre-release piracy caused "serious damage to the performers, creators and producers of music".

"People who have access to pre-release music by virtue of their job, and who sell or distribute it illegally, should note that record companies large and small are taking a zero tolerance approach to such activity," sad the IFPI's chief executive John Kennedy.


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