UMG RECORDINGS, INC., a Delaware corporation, Plaintiff-Counter-Defendant-Appellant, v. TROY AUGUSTO, an individual doing business as Roast Beast Music Collectables doing business as Roastbeastmusic, Defendant-Counter-Claimant-Appellee., 628 F.3d 1175

Summary

The owner produced compact discs (CDs) of copyrighted sound recordings and sent them unsolicited to music critics, radio disc jockeys, and other recipients for promotional purposes. The seller obtained some of the CDs from various sources and sold them at auction. The court of appeals held that the mailing of the CDs to the recipients effected a sale for purposes of the first sale doctrine under 17 U.S.C.S. § 109(a). Although the owner placed written restrictions on the CD labels, the restrictions did not create a license agreement. Because the CDs were unordered merchandise, the recipients could dispose of them as they saw fit under the Unordered Merchandise Statute, 39 U.S.C.S. § 3009. The effect of § 3009 was to render the recipients owners, not licensees, for purposes of the first sale defense. Also, there was no showing that the recipients agreed to enter into a license agreement when they received the CDs. The owner's transfer of possession to the recipients without meaningful ...