UMG v. Augusto: Big Win for Consumer Rights.

Recently, I wrote a piece on Joystiq which referenced the then still pending UMG v. Augusto suit. The verdict is in on that case, and it’s a big win for consumer rights. The motion for summary judgment is available here, but I will summarize it for you. Promo CDs are in fact governed by the first sale doctrine even though they are never sold to the consumer. This means that, by extension, promotional DVDs and games are also covered by the first sale doctrine in the same manner. So long as the producer transfers title in those items to someone else, then that satisfies first sale. Should the producer actively recover the products, then first sale would not apply, but since these items are distributed without any intention of being returned to the producer, then it is considered sold.

The victor here is clearly the consumer. This means that if you get your hands on a promotional CD, DVD, or game, even one labeled not for resale, you can keep it or sell it on eBay without worry about repercussions from the game’s publisher. More importantly, it prevents an expansion of the first sale doctrine, which could have limited your ability to resell games you’ve purchased at all. Game resellers, both those on eBay and the major retail chains, should be applauding this decision as it supports their livelihood.

This was a big win for consumer rights, and a big win for all of us as consumers.

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About Mark Methenitis

Mark Methenitis is an attorney in Dallas Texas. Mark received his Juris Doctorate and his Master of Business Administration from Texas Tech University and his Bachelor of Arts from The University of Texas.

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