A federal judge is declaring as unlawful a one-of-a-kind website enabling the online sale of pre-owned digital music files.

ReDigi, which opened in late 2011, provides a platform to buy and sell used MP3s that were once purchased lawfully through iTunes.

The case weighed the so-called first-sale doctrine, the legal theory that people in lawful possession of copyright material have the right to resell it. U.S. District Judge Richard Sullivan, ruling in a suit brought by Vivendi's Capitol Records, said the doctrine did not apply to digital goods.

Saturday's decision (.pdf) comes as online retailers such as Amazon and even Apple have patented platforms for the reselling of used digital goods such as books, music, videos and apps. Judge Sullivan's ruling, if it withstands appellate scrutiny, likely means used digital sales venues must first acquire the permission of rights holders.

"The novel question presented in this action is whether a digital music file, lawfully made and purchased, may be resold by its owner through ReDigi under the first sale doctrine. The court determines that it cannot," the judge ruled.

The reason, the judge ruled, is because copying, or an illegal "reproduction" of a music file, takes place, despite ReDigi's claims to the contrary.

"Because the reproduction right is necessarily implicated when a copyrighted work is embodied in a new material object, and because digital music files must be embodied in a new material object following their transfer over the internet, the court determines that the embodiment of a digital music file on a new hard disk is a reproduction within the meaning of the Copyright Act.

Capitol Records, claiming ReDigi was a "clearinghouse for copyright infringement," sued the Massachusetts-based startup and was seeking up to $150,000 in damages per track. The judge agreed with the label's claims of direct, contributory, and vicarious infringement of Capitol's reproduction rights, and said ReDigi had no fair-use defense to the infringement.

ReDigi said its customers had a right to upload their purchased iTunes files (.pdf) into ReDigi’s cloud. ReDigi claimed no copy of the file was made. And, under ReDigi’s technology, the original uploaded file that is sold cannot be accessed by the seller any more through ReDigi or via the seller's iTunes account.

The judge, however, ruled that "the laws of physics" proved otherwise when it comes to copying files.

ReDigi’s technology cannot stop customers from file sharing or copying iTunes music purchases before they had uploaded them to the service.

Prices for songs vary on ReDigi, whose future is in doubt under Sullivan's ruling. The company earns up to 15 percent per transaction.

ReDigi did not immediately respond for comment.

*Home Page Photo: Mandiberg / Flickr *