History
ReDigi launched its public beta site in October 2011. [2] It was founded by John Ossenmacher, along with his daughter, who had the idea of creating an online drop box where people could donate their unwanted digital media. Ossenmacher hired a team of programmers, mathematicians, business professionals, and legal advisors to build the service.
ReDigi filed voluntary petitions for Chapter 11 reorganization in United States bankruptcy court in August 2016. The company arranged multiple sources of funding to restructure its current debt and planned to exit its restructure in 2017. [3]
Services currently offered include cloud storage for verifiable music, ebooks and other digital goods that were legally purchased, cloud streaming for listening to stored music, reading books, and utilizing other digital media, and buying and selling of used digital goods such as music, ebooks, games, apps and other digital media directly from other users on ReDigi.
Capitol Records lawsuit
 | This section needs to be updated.(April 2020) |
In January 2012, Capitol Records sued ReDigi in New York Federal Court stating that Redigi was liable for contributing to copyright infringement demanding that ReDigi remove Capitol-owned material and pay $150,000 per track. [2] On February 6, 2012, U.S. District Judge Richard Sullivan denied the preliminary injunction. [4] [5]
Vicarious liability for copyright infringement exists where the defendant "has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities." [6] In ReDigi, the court held ReDigi vicariously liable because it "exercised complete control over its website's content, user access, and sales," and financially benefited from every sale due to its transaction fee. [7]
On March 30, 2013, the judge granted in part a summary judgment motion in favor of Capitol Records. The court stated:
ReDigi has vicariously infringed Capitol's copyrights" and found RediGi guilty of direct contributory infringement. ReDigi seeks judicial amendment of the Copyright Act to reach its desired policy outcome. However, "[s]ound policy, as well as history, supports [the Court's] consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology. Sony, 464 U.S. at 431. Such deference often counsels for a limited interpretation of copyright protection. However, here, the Court cannot of its own accord condone the wholesale application of the first sale defense to the digital sphere, particularly when Congress itself has declined to take that step. [8]
On April 20, 2013, United States District Court, Southern District of New York has ruled that ReDigi is engaged in illegal activity. Judge Richard J. Sullivan wrote that "ReDigi has vicariously infringed" on copyrights and found ReDigi guilty of direct contributory infringement. [9]
The 2nd Circuit Court of Appeals heard ReDigi's appeal on August 22, 2017. [10] [11] [12] The Library association and Twenty-Four significant, University Law Professors, back ReDigi at appeal. [13] [14]