eBay mutes iTunes song auction

eBay on Thursday canceled an auction that sought to resell a music download that was purchased through Apple Computer’s iTunes Music Store, saying the attempted sale violated its listing policies.

The move for now brings to an end a quirky effort to dramatize some of the less-obvious effects of the music industry’s shift from physical media sales to digital downloads–in this case the question of whether Internet customers can resell songs they’ve purchased in digital form.

Web developer George Hotelling had put the song up for auction Tuesday evening, hoping to highlight the problem.

“eBay shutting down the auction for violating its terms of service doesn’t have much to do with the original question of whether people can transfer legally purchased music downloads,” Hotelling said in an interview Thursday.

Under the “First Sale” doctrine, the owner of a lawful copy of a work is allowed to sell it without the permission of the copyright owner. But such a policy could cause complications if applied to works sold only in digital form.

In launching the iTunes store in April, Apple CEO Steve Jobs proclaimed that consumers don’t want to rent music but rather own it. But restrictions on resale, if they are enforced, would seem to suggest more of a rental model than an ownership model.

Apple declined to comment.

Although iTunes tracks come with copy restrictions, Hotelling said he believes he can successfully transfer the file to a third party. One extreme solution would be to hand over his account information and password to the buyer, although he said he would rather not have to resort to that method.

iTunes’ terms of service are the most liberal among Internet music download services, allowing buyers to burn songs to CDs more or less freely and transfer them to Apple’s iPod portable music players. In addition, iTunes customers can authorize any Macintosh computer to access their music files, although only three computers can be authorized at once.

Hotelling said he has not contacted Apple or heard from the company since seeking to auction the song, the Devin Vasquez remake of Frankie Smith’s song “Double Dutch Bus.”

Hotelling said he received a notice from eBay on Thursday that it was shutting down the auction for violating its downloadable media policy, which “prohibits the listing of items or products to be delivered electronically through the Internet.”

He said he sent a reply to eBay seeking to have the auction reinstated, arguing that he could transfer the file in a manner that would not violate the download policy. As of late Thursday, he had not received a response, he said.

eBay did not immediately respond to a request for comment.

A long history of debate
One online copyright expert said the application of the first-sale doctrine to downloads has been actively debated for years, with policymakers until now largely opposed to extending the privilege from physical to digital goods.

Seth Greenstein, an attorney with the Washington, D.C., law firm McDermott Will & Emory, said a green paper put out by the U.S. Patent and Trademark Office in 1992 found that the first-sale doctrine does not apply to digital goods. The paper authors argued that the doctrine relates to the physical distribution of a work, but that the transfer of digital goods implies making a copy of the work–something that’s not explicitly addressed in the doctrine.

That take was reiterated in an analysis of the applicability of the first-sale doctrine to digital goods from the U.S. Copyright Office, a study required as part of the 1998 Digital Millennium Copyright Act.

The study examined the argument that the first-sale doctrine should apply to digital goods, as long as resellers erased their own copy of the work approximately simultaneously with the transfer of the file, a process known as “forward and delete.”

“Proponents of expansion of the scope of (the first-sale doctrine) to include the transmission and deletion of a digital file argue that this activity is essentially identical to the transfer of a physical copy and that the similarities outweigh the differences,” the study states. “While it is true that there are similarities, we find the analogy to the physical world to be flawed and unconvincing.”

The Copyright Office added, however, that the issue should not be considered resolved once and for all, pointing to important possible exceptions, notably for libraries.

Greenstein, who has represented groups seeking to extend the first-sale doctrine to digital goods, said the official interpretation is troubling and likely open to further clarification. Greenstein added that online vendors such as Apple should in theory be able to create technology to support forward-and-delete capabilities.

“The essence of the transaction is no different in transferring a physical and a digital work. What’s being transmitted in both cases is access to the work,” he said. “It’s counterintuitive to add new restrictions on technology that is inherently more flexible than its physical counterpart.”

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