campus radio station CDs and ILL

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  • We have a large number of CDs in our collection that were donated to us by the campus radio station (student managed) 7 or 8 years ago. At that time, we decided that these could be loaned to our patrons here, but that they were not available for interlibrary loan.

    Many of the CDs have the following warning label:

    LEGAL NOTICE: License. This CD is property of record company and must be returned on demand. It is licensed for promotional use and has not been sold. The CD cannot be transferred without consent of record company. Use or retention of CD signified acceptance of this license.

    The CDs have been cataloged and we get many ILL requests for them (alternative music). We have not been successful in getting to see any licensing or other documentation about them. There has been a turn over of several faculty advisors for the radio station. but the current advisor thinks we should loan them. Our question is who actually owns the CDs? It is our opinion that interlibrary loan may be allowed, but patrons are going to rip and burn them. Should we care about that? They rip and burn CDs we have purchased, but is this different or not?
  • There was a lawsuit last year in which Universal Music sued a man who obtained these sort of promotional CDs and resold them on eBay. His position, which the lower court adopted, was that these were gifts, sent unsolicited through the mail, and the doctrine of first sale in copyright law applied to allow the owner of the physical media to rent, loan or resale that copy. The court adopted this position and dismissed the case. Universal said at the time that it would appeal, and I do not know if an appeal has been filed and/or resolved. My opinion is that the lower court got this case right, but the real point for you, I think, is that this is an unsettled and controversial issue.

    Here is a story about the lawsuit:

    An update just to expand a little. First, I can find no evidence that an appeal of this decision has been filed. Second, a specific finding of the district court was that the printed declaration of a license was invalid. Basically, the court said you could not send an unsolicited item to someone through the mail and create an obligation for them to use that itemn in a certain way and/or return it to you. Since the "license" was invalid, the transaction was treated as a gift, and therefore first sale applied to the gifted item; the recipient was free to dispose of the item as he saw fit.

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