ReDigi, a company that lets people buy and sell “pre-owned” digital music, said today that it isn’t concerned about Amazon’s new patent on methods for reselling and lending used digital goods.

GeekWire broke the news of the Amazon patent earlier this week. The patent, originally filed in 2009 and granted on Jan. 29, covers transferring digital goods among users, setting limits on transfers and usage, charging an associated fee, and other elements of a marketplace for used digital goods.

News of the patent put a spotlight on Massachusetts-based ReDigi because it already operates a market for used digital goods. However, ReDigi said in a statement today that its approach is “significantly different from the marketplace described in Amazon’s patent.”

Here’s an extended excerpt from ReDigi’s statement.

What did Amazon Patent?

As ReDigi understands Amazon’s patent, it is for a marketplace that employs a seller to buyer “copy and delete” mechanism, in which a user sells a “copy” of a digital good to another user while both the buyer and seller simultaneously own the copy (even if only for an instant in time), and then supposedly the seller’s copy is subsequently “deleted.”  ReDigi takes no position on the legality of this technique under copyright law, but simply notes that it has been central to the music and publishing industries’ skepticism and opposition to a “used” digital marketplace, and that the ReDigi Marketplace does not use this technique.

How is ReDigi’s technology and intellectual property different from the “used” marketplace Amazon intends to create, as described by their patent?

ReDigi’s advanced technology employs a “Verification Engine” and “Atomic Transaction”, resulting in a TRANSFER ONLY mechanism. This means that all digital goods are first verified to ensure that they are legally eligible for resale.  Once verified, ReDigi’s technology transfers the “original” good from the user’s computer to ReDigi’s Cloud (Marketplace).  With ReDigi’s method, only the “original” good is instantaneously /atomically transferred from seller to buyer without any copies.  ReDigi then assists the seller with an anti-virus like software application that monitors the seller’s computer and synced devices to ensure that any personal-use copies of the sold good are removed.

Why should artists, authors and copyright holders be concerned by Amazon’s approach used digital market?

To our knowledge Amazon has NEVER compensated artists, authors or copyright holders for the secondary sale of their goods, and they have sold billions of dollars worth of them.  There is nothing in the Amazon patent that addresses this issue.

In contrast, the ReDigi model frees up billions of dollars of locked up wealth.  It enables the participation of all parties–from consumer to artist/author to copyright holder–in the profit chain.  The nexus between the physical and digital marketplace can be defined by the emergence of a true secondary marketplace. ReDigi has managed to create just that, not only by solving the riddle of “original” content transfer, but by taking an enlightened step forward in bringing the artists and copyright holders back into the revenue stream.

ReDigi’s marketplace for used digital goods that has attracted legal attention from major music labels. Amazon is already using elements of its technology in its feature for lending Kindle books.

Comments

  • Emmett McAuliffe

    Todd

    Thanks for the lengthy excerpt from the Redigi’s statement. Here are IMO the main problems with it:

    Their only reason for thinking that it won’t fly is because of what they imagine to be the “music and publishing industries’ skepticism”. It is difficult to pinpoint a font of skepticism for such a scatterbrained industry, but I’m certain that the fulcrum of their skepticism is *not* some technical rub about the file being retained by the seller “for an instant in time”. If the industry does have a fulcrum, it damn well ought to be whether an app lets to users enjoy one download for the price of one,…what we cloud lawyers call “counterfeit creation”.

    And on this front, Redigi falls down miserably. This is for two reasons:

    1) Although redigi claims to “monitor” (sounds creepy) the seller’s computer and synced devices to ensure that any personal-use copies of the sold good are removed, what about unsynched devices? That’s every computing source that I’ve chosen not to synch, plus CD players, flash drives, etc. For example, college dormitory hand-to-hand copying will be completely unaffected.

    2) Redigi’s use of the phrase “personal-use copies” (what the heck is that?) belies an even more serious problem. There are not modifiers of “copies”. There are no good copies, bad copies, personal use copies, etc. They are all identical. The same. Thus, Redigi has no earthly idea whether the song that it is putting in a user’s account, and letting him resell for money, was legally purchased or not. Therefore their act of removal of the song upon sale or other transfer is just an empty gesture. Counterfeiters making money off the backs of labels, … and artists and labels saying “OK” to that just because Redigi has given them a “taste”?? Please. No wonder EMI sued.

    Redigi’s assertion boils down to: Amazon’s method is wrong because theyre going to get sued. This is ironic because Redigi, not Amazon, are the only ones who have been sued by those industries (this, despite the fact that Amazon launched a cloud service that was infringing too).

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