Hush, hush! Keep it down, down! Record company "not for resale" labels aren't enforceable! Oh-oh-oh-oh-oh hush, hush!
The Ninth Circuit has decided that if you get unsolicited CDs through the mail, you can turn around and sell them on eBay. It's not copyright infringement, notwithstanding a label on the CD that says "Promotional Use Only—Not for Sale."
The case is UMG Recordings Inc. v. Augusto, 9th Cir., No. 08-55998, 1/4/11). Here is the opinion [pdf], and BNA has a summary here.
This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws.
Punishable under federal law? Well, I guess not!
I remember first spotting this issue when, as a kid, I had the sublime experience of winning a call-in radio contest on hit-music station FM 102 in Sacramento. I got a free cassette from the prize vault. I think it was a cassingle of Til Tuesday's "Voices Carry."
I remember seeing through the plastic swivel case there was a legend, stamped in shiny gold lettering on the printed insert (the "J-card"), that said the cassette was the "property of" CBS Records and I couldn't sell it.
At the time, I didn't see how I could win a prize and yet it would still be the property of the record company. But hey, I thought, that's legal stuff that is beyond me to understand. Of course, no, it wasn't beyond me. It was just a legal hail-Mary. It was just a promotional cassette that the record label gave to the radio station to make the radio station happy so that the radio station could give it to a listener to make listeners happy, but to try to avoid cannabalizing the record company's own sales, they did the embossed gold-lettering. To use the language of the 1980s, it was, legally speaking, "kind of lame."
The fact is, you just can't believe everything you read, even when it is printed in gold-embossed lettering.
Now UMG v. Augusto didn't decide the exact same question as my cassingle presented. In UMG, it was persuasive to the Ninth Circuit that the CDs were sent unsolicited through the mail. The court looked to the federal Unordered Merchandise Statute (39 U.S.C. §3009), which says that if you get stuff through the mail you didn't order, the company that sent it to you can't bill you for it, and you get to keep whatever it is as a gift.
It's a timely decision, because this time of year all of Southern California is lousy with unsolicited "For Your Consideration" DVDs sent to academy voters.
Now that I'm thinking about it, I'm not sure I got a cassingle. It might have been the whole album. But even if it wasn't a cassingle, it might as well have been. "Voices Carry" was the one good song. And besides, I like saying "cassingle."
By the way, the court said you can still pull this kind of shenanigans with software, subject to some limitations.
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