MusicScribe BLOG

If you’re a collector of used CDs, chances are you’ve wrestled with whether or not to purchase a “promo” at some point in time. These CDs typically carry a “Promotional – Not For Resale” or similar label. When I worked at a Christian retail store as a music buyer, I was routinely handed several promo CDs every time a music rep made a sales call. Later, they began sending them in the mail on a regular basis.

Collectors seek out promos because:
A) They’re rare, and
B) They sometimes contain music that differs from the final retail product.

If you’re a collector, you may have avoided purchasing these rarities due to the “Not For Resale” label. For years, it wasn’t tested in courts, and so most people just went ahead and sold them.

In April of this year, Universal Music Group (UMG) filed a lawsuit against a California based, used CD dealer named Troy Augusto in California Federal Court. They claimed he “illegally sold promotional CDs belonging to the major record companies” (emphasis mine). Note that even though UMG transferred promotional CDs from their own possession into the hands of DJs, music critics, distributors, etc., they held the view that the CDs still belonged to them.

UMG argued that promo CDs are merely licensed, not sold, so the first sale doctrine does not apply. The court saw otherwise.

In June, the court ruled:
“Augusto’s actions are protected under the first sale doctrine. Accordingly, Plantiff UMG’s motion is DENIED and Augusto’s Motion is GRANTED as to UMG’s copyright infringement claim.”

What does this mean? It means you are free to purchase or sell promo CDs regardless of what the label states. (Of course, I’m not a lawyer, so you shouldn’t take my opinion as legal advice.)

For years, record labels have been under the impression that they can tell you what to do with a CD after it came into your possession legally. In the past, the courts have sometimes sided with the music companies on these types of issues. It’s good to see the courts get it right one time.