Why You Can't Resell a Downloaded Song and What Capitol Records v. ReDigi Decided

Under Capitol Records v. ReDigi, reselling a downloaded music file is copyright infringement in the United States, even if you delete your own copy first. The first-sale doctrine, 17 U.S.C. § 109, lets the owner of a physical copy sell that copy. It does not reach digital transmissions, because delivering a file to a buyer requires making new copies, and first sale excuses distribution, never reproduction.

The rule was announced by the Southern District of New York in March 2013, and the Second Circuit affirmed it in April 2014 for substantially the reasons the district court gave. No federal appeals court has departed from it since. If you want to know whether used digital goods can change hands online, the answer, for now, is no, not by transmission, no matter how carefully the technology is built.

What ReDigi promised: a used-music marketplace for downloads

ReDigi launched in late 2011 billing itself as the world's first marketplace for used digital music. The mechanics were easy to explain. A seller installed ReDigi's software, which scanned an iTunes library, confirmed which tracks had been legitimately purchased, uploaded the eligible ones to ReDigi's cloud locker, deleted the seller's local file, and listed the song for sale. Buyers paid below retail. Sellers were compensated largely in store credit, and ReDigi kept a cut.

The defense was engineered into the product. ReDigi insisted its verification layer guaranteed that only one usable copy of a track existed at any moment, so a sale moved music from person to person the way a used CD changes hands at a record shop. Capitol Records sued in early 2012. The case became the long-awaited test of whether the first-sale doctrine could stretch from discs to downloads. The technology worked as designed. The law did not.

First sale in plain terms: what § 109 actually protects

First sale is a limit on the distribution right. Under 17 U.S.C. § 106(3), a copyright owner controls the sale and other transfers of copies of the work. Under § 109(a), that control ends with the first authorized sale: the owner of a particular lawfully made copy may "sell or otherwise dispose of the possession of that copy" without permission. That is why used bookstores, record shops, and library book sales are lawful. The doctrine descends from Bobbs-Merrill Co. v. Straus, the 1908 Supreme Court decision that refused to let a publisher control resale prices through a notice pasted inside a book.

Two boundaries matter for digital goods. First, copies and phonorecords are defined in § 101 as material objects, discs, paperbacks, things you can hold. Second, § 109 excuses only distribution. It says nothing about the reproduction right in § 106(1), which is the right implicated whenever a file moves between devices or across a network. Reselling a disc copies nothing, so first sale is enough. Transmitting a file always copies something, so first sale never is. One more wrinkle: § 109 protects owners, not licensees. The Ninth Circuit drew that line sharply in Vernor v. Autodesk, holding that buyers under restrictive software licenses may not own their copies at all, a wrinkle that matters, since most download stores frame purchases as licenses.

The holding: why a transmission is not a distribution

Judge Richard J. Sullivan's March 2013 opinion framed the problem precisely. When ReDigi delivered a song, the buyer received a copy newly made on the buyer's device, while the seller's hard drive, the material object holding the original, stayed exactly where it was. Section 109(a) protects the ability to dispose of possession of a particular material object. In a transmission, no material object changes hands, so the defense never engages at all. And delivering a digital good requires reproducing it, which independently implicates § 106(1). That is the ReDigi rule in one breath: distribution of a material object is what first sale excuses, and a transmission is never that.

The court leaned on work Congress had already commissioned. The Copyright Office's 2001 DMCA report concluded that digital transmissions cannot fit the first-sale model, because the recipient obtains a newly created copy rather than the object the seller owned. ReDigi answered with its deletion guarantee: the service verified that the seller's copy was erased, so the transaction matched the economics of handing over a disc. The court rejected that framing in the passage everyone now cites, holding in substance that the first-sale doctrine does not permit a transmission because the transmission itself results in a reproduction. Deleting afterward cannot undo the copying that had to happen first.

The record made the stacking obvious. Uploading a track from a seller's computer to ReDigi's cloud server made a copy. Storing it there maintained a copy. Delivering it to a buyer made another, with buffer copies passing through memory along the way. The reproductions multiplied regardless of intent. ReDigi later rebuilt the service so that songs lived in the cloud from the start and no local copy ever touched a seller's device. A follow-on ruling in 2015 rejected that design for the same reason: reaching each new buyer still reproduced the work. The defect was never sloppy engineering. A digital transfer cannot happen without copying. The ReDigi rule is about physics, not intent.

The fair-use defense and the marketplace's own liability

ReDigi also pleaded fair use, and the § 107 factors did it no favors. The use was plainly commercial. It was not transformative, the marketplace delivered the identical recording to a new audience and added nothing. Entire works changed hands, not excerpts. And the market-harm factor cut deepest: every used download sold plausibly displaced a new sale. A defense built for commentary, criticism, and parody does not stretch to a resale business that substitutes for the original.

The liability findings followed the same logic. The court granted Capitol summary judgment on direct infringement for the reproductions made on ReDigi's own servers, and on contributory infringement for the copying its users performed through the service. Platforms get latitude when a technology has substantial lawful uses, the protection Sony v. Universal carved out for the VCR, but ReDigi had no second story to tell. A service whose only function is resale of complete works did not strain the secondary-liability standards courts articulated in MGM v. Grokster. Vicarious liability and remedies were left for later rounds.

Aftermath: appeal, damages, and the rule's reach today

The Second Circuit affirmed in April 2014, substantially for the reasons the district court gave, which made the rule controlling precedent in that circuit and strong persuasive authority everywhere else. The remedies phase finished the company. In 2016, the district court entered a statutory damages award against ReDigi reported at roughly $3.5 million. The used-music marketplace never reopened.

The reasoning has proved durable enough that other courts keep borrowing it. In Hachette v. Internet Archive, the litigation over the archive's ebook lending, the district court and then the Second Circuit on appeal in 2024 reached a parallel conclusion: transmitting a digital copy is a reproduction, and no first-sale theory rescues it. Meanwhile, commerce settled into licensing. Download stores sell access rather than ownership, and their terms ban transfer outright. When Microsoft closed its ebook store in 2019, purchased titles stopped working and customers received refunds. They had owned licenses, not files. Legislative proposals to extend first sale to digital goods surface now and then; none has become law.

Digital resale rights outside the United States

Other jurisdictions run the same analysis through their own exhaustion doctrines and hit the same wall. In the European Union, the Court of Justice held in Tom Kabinet in 2020 that supplying an ebook by download is a communication to the public, not a sale of goods, so rights never exhaust and resale infringes. The same court had allowed resale of downloaded software licenses in UsedSoft v. Oracle in 2012, but that result rests on the EU's software-specific directive and has not been extended to music, books, or games. If the site reselling your work is hosted abroad, both the legal analysis and the removal path change, and cross-border takedown practice is a discipline of its own.

If someone is reselling your digital content

Now the practical part. A site selling used copies of your tracks, ebooks, presets, courses, or plugins has no first-sale defense. Under the ReDigi rule, there is no such thing as a lawfully used download that changes hands by transmission. Every listed file is an unauthorized reproduction, and every delivery is an unauthorized distribution. That puts these copies squarely within reach of the DMCA's notice-and-takedown machinery.

Three steps matter in practice. First, confirm the copies are hosted. A file delivered over a network sits on a server, and a server copy can be reached with a compliant notice under 17 U.S.C. § 512. Second, use the marketplace's own channel. App stores and resale platforms run intellectual-property reporting routes, and providers acting on a proper notice keep their safe-harbor protections. Third, keep records. When someone is selling your content at a discount, capture listings, prices, and dates before anything disappears; resale framing helps show willfulness and supports repeat-infringer enforcement.

One caution before you file. First sale remains fully alive for physical media. Used CDs, vinyl, and print books listed on Amazon or eBay are lawful, and a notice aimed at them will be rejected, and can create liability if sent carelessly. Review fair-use and ownership questions for the specific listing before anything goes out. Sorting lawful discs from unlawful transmissions is the one judgment call this area demands, and it is worth making slowly.

If you were hoping to resell your own downloads

The rule binds individuals the same way it bound a funded startup. Selling downloaded music, passing on a finished ebook, or cashing out a game library is infringement by transmission, whatever the platform's marketing implies, and the license almost certainly bans it anyway. Listing an account for sale is not a loophole, because the underlying files never move. The lending, gifting, and family-sharing features on download platforms exist because the platform grants them contractually, and it can withdraw them.

Music itself drifted toward streaming, where subscribers hold nothing to resell, so the live resale question now mostly involves ebooks, games, and other files. The realistic resale markets are the ones platforms build themselves, such as in-game item exchanges, where every transfer is licensed and supervised. What you exercise there is permission, not ownership. The ReDigi rule is the reason the difference matters.

Frequently asked questions

Does the first-sale doctrine cover digital downloads at all?

Partly. You can resell a physical copy you own, a CD, a record, a printed book, because § 109(a) protects selling a particular material object. You cannot transmit a downloaded file to a buyer, because the transmission makes new copies and no material object changes hands. Capitol Records v. ReDigi closed off every engineered version of that workaround.

Was the ReDigi rule issued by the Second Circuit or the district court?

The core opinion came from the Southern District of New York on March 30, 2013. The Second Circuit affirmed in April 2014, substantially for the reasons the district court gave, which made the rule binding precedent in that circuit. No federal appeals court has disagreed since, so it functions as settled law nationwide.

Does the ReDigi ruling make reselling an NFT infringement?

No court has applied the case to NFT resale directly, and selling the token itself is not a copyright act. But an NFT purchase rarely conveys copyright ownership, and any copying or re-hosting of the linked artwork runs into the same reproduction logic. What you may lawfully do with the underlying work depends on the license you received, not the token.

What happened to ReDigi after the ruling?

It lost the March 2013 summary judgment and its 2014 appeal. A 2015 follow-on ruling reached its second-generation cloud service. In 2016 the district court entered a statutory damages award reported at roughly $3.5 million, and the used-music marketplace never reopened. The company promised copy-free transfers; the courts held that every transfer copied.

Can I send a DMCA notice over someone reselling my digital files?

Usually, yes. A resale site hosts and transmits copies, which the ReDigi rule treats as unauthorized reproduction and distribution, and hosted copies can be reached with a § 512 notice to the provider or a report through the marketplace's channel. The exception is physical media: used CDs, vinyl, and print books are protected first sales, so leave those listings alone.

What to do next

If you are a rights holder:

1. Save evidence before it disappears, listing URLs, prices, dates, and screenshots, following the same discipline as a formal takedown evidence checklist.
2. Sort the listings. Physical media resale is lawful and untouchable; transmitted digital copies of your work are actionable. Do not mix the two.
3. Identify where the infringing files live and send a proper § 512 notice to the host, or use the marketplace's own reporting channel.
4. Escalate if the host ignores a valid notice. Registrars, search engines, and app stores are the next rungs on the ladder.
5. Decide whether this is a one-off or a pattern. Recurring resale of your work is what professional takedown handling exists for, and WebDMCA's Protection Pro is built for exactly that volume.

If you are a buyer, treat your download library as access, not property. The resale you imagined was settled against it in 2013.