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This information is taken directly from the court opinion. It is not taken out of context nor is it altered.

From UMG Recordings vs Troy Augusto, 558 F. Supp. 2d 1055 - Dist. Court, CD. California, 2008

Finally, the only benefit to a license for UMG is to restrain transfer of its music. This purpose was rejected 100 years ago by the Supreme Court. See Bobbs-Merrill Co. v. Strauss, 210 U.S. 339 (1908) (rejecting a book publisher's attempt to restrict resale of a book through a label that prohibited sales for less than one dollar); see also RCA Mfg. Co. v. Whiteman, 114 F.2d 86, 90 (2d Cir. 1940) (Hand, J.) ("[RCA] had no power to impose the pretended servitude upon [its] records [by placing a 'Not Licensed for Radio Broadcast' label upon them]."); SoftMan, 171 F. Supp. 2d at 1084 ("Adobe frames the issue as a dispute about the ownership of intellectual property. In fact, it is a dispute about the ownership of individual pieces of Adobe software.").

Unlike the use of software, which necessitates a license because software must be copied onto a computer to function, music CDs are not normally subject to licensing. Therefore, the benefits of a license for software do not exist under these facts.

Looking to the economic realities of the transaction, UMG's distribution of Promo CDs provides the recipient with many critical rights of ownership, including the right to perpetual possession and the freedom from obligations to UMG. Accordingly, UMG's distribution of Promo CDs to the music industry insiders is properly characterized as a gift or sale, not a license, and title to the CDs transferred to the insiders. Augusto is thus protected by the first sale doctrine.

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