Universal Music Group: Throwing Away Promotional CDs Is An "Unauthorized Distribution"

All promotional CDs are forever the property of Universal Music Group and giving or throwing them away are “unauthorized distributions,” according to a brief filed by UMG. In a lawsuit filed in federal court, UMG claims that ownership rights to promotional CDs, typically sent to DJs, reviewers, and others in the music business to generate hype for new releases, are expressly retained by the label. The Electronic Frontier Foundation is taking up the fight against this absurd position in UMG v. Augusto.

The defendant, Troy Augusto, is an eBay seller who sells promotional CDs that he finds at used record stores. UMG, a member of the reigning Worst Company in America, sued, claiming that Augusto was distributing their material in violation of UMG’s copyright, and that any transfer, even to a garbage can, is unauthorized. August and EFF have counterclaimed that UMG is attempting to restrict Augusto’s “first sale” rights. In their brief, they argue that the first sale doctrine allows Augusto, as owner of the CDs, the right to sell or transfer them as he sees fit. In establishing that UMG’s distribution of promotional CDs is an effective transfer of ownership, EFF points out that UMG sends the CDs unsolicited and does not keep records of who receives the discs, nor do they typically attempt to have the CDs returned or warn recipients that they might try to:

In short, those to whom UMG mails “promo CDs” enjoy all the principal hallmarks of ownership: their possession is unlimited in time, they are under no obligation to return the CDs, and there is no penalty to them should the CDs be lost, damaged or destroyed. UMG, for its part, also behaves as though it has parted with ownership: it does not keep records regarding the whereabouts of the CDs, nor has it ever sought their return from the recipients.

Both parties filed their motions for summary judgment in federal court a few days ago, and a ruling could come in early May.
UMG v. Augusto [Electronic Frontier Foundation]
(Photo: Getty)

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  1. Munsoned says:

    Thank God for the EFF.

  2. ndonahue says:

    IANAL, but it feels like this should be treated the same way an individual treats any unauthorized provision of goods or services — as a gift.

  3. snoop-blog says:

    c’mon troy i’m pulling for ya!

  4. nyaz says:

    O no that Resident Evil soundtrack my friend gave me is illegal! Just like the rest of my music.

  5. Angryrider says:

    This is bull. If UMG were any worried about “Unauthorized Distribution” they would have taken back the CDs they distributed months ago instead of attacking a guy who’s trying to find new use for them.

  6. to record labels: please stop trying to reduce our 1st sale doctrine rights

    k thanx bai

  7. rmz says:

    Can’t we just launch all of the record company executives into the sun at some point? Please?

  8. @ndonahue: Oooh, reminds me of the law regarding gifts. Yup, if you didn’t order it, you can keep it:

    You, the consumer, may only legally be sent two types of merchandise through the mail without your consent or agreement:

    [1.] Free samples which are clearly and conspicuously marked as such.

    [2.] Merchandise mailed by a charitable organization that is soliciting contributions.

    You can consider the merchandise a gift if you wish….

    If you open the package and don’t like what you find, you may throw it away.

    If you open the package and like what you find, you may keep it for free. In this instance, “finders-keepers” applies unconditionally.

    Receipt of Unsolicited Merchandise [USPS]

  9. coopjust says:

    Geez, I thought the record companies had some common sense.

    Unless you have a written contract with the person you are giving the promo CDs to, I don’t see how throwing them away or giving them away could be unauthorized distribution if you don’t keep any copies (burned CDs or digital files on your computer).

    It’d be moronic if you weren’t allowed to throw something out. If you hated someone (e.x. anti net neutrality shill and former ATT board member Ed Whitacre), you could just send them loads of CDs with copyrighted content, and they’d have to store them infinitely.

  10. Bladefist says:

    @rmz: That would be too quick and painless. We need to waterboard them. I’m a capitalist, and I see the problem with people stealing music. But since about 2 years ago, I’m seeing they are getting crazy here. I mean come on. They are using our government, wasting our tax dollars pursuing this stuff, they are threatening universities. They are almost terrorists. lol

  11. Pithlit says:

    I can’t believe the idiots at UMG. “Oh, no! Promotional material that just might encourage people to buy even more of our product is out on the loose! We must stop them!!!!” Even if they were legally and ethically in the right, it’s a stupid move.

  12. @rmz: We can put them on the same ship as all the old people:

    Lets send more old people into space. Permanently. [Maddox]

    (Actually, this is just an awesome excuse to test out the image-o-matic 3000.)

  13. CMU_Bueller says:

    How did Agusto get the CDs? If he is getting them from a record store, then the store is likely violating UMG’s rights. If he is getting them because he’s a reviewer, then what constitutes a business relationship? He buys a UMG CD to review with his own money, UMG sees this and sends him more CDs to review, are these new CDs unsolicited or did his review create a relationship?

    This post doesn’t give us enough info to make a judgement.

  14. hi says:

    What the heck is a cd?

  15. modenastradale says:

    I, for one, am having a great time watching a (corrupt) dying industry squirm and twitch.

  16. scarletvirtue says:

    I have an idea … anytime I get one of those free/promotional CDs at a street fair or wherever, once I’m done with it – I’ll just send it back to the label.

    You know, since it’s their property and all.

  17. snoop-blog says:

    i’d be willing to bet the artists themselves don’t give a crap, and even if umg wins some sort of suit, the artists will still get the shaft.

    could i mail them my poop with the same rights? that way if they don’t indefinately store my pooh, they will be in violation of my ass’ rights.

  18. mammalpants says:

    jesus. everything they say sounds like a crotchety old man.

  19. hypnotik_jello says:

    @CMU_Bueller: Did you RTFA? He says he acquired the cds from a used record store shop.

  20. tomok97 says:

    I used to work in radio and the vast majority of these CDs were (and probably still are) used as prizes. “Caller 10 gets the latest CD from The Wallflowers” that sort of thing. The record labels gave them to radio for that express purpose. So even if the label did keep track of which stations got which CDs, there’s no way of telling where they went from there. The labels gave away these CDs with the express purpose of them being given away on-air as a form of promotion. Therefore, they’re prizes.

    It would be no different than if the Frito-Lay Sweepstakes wanted Hollyfeld’s RV back.

  21. Buran says:

    @Michael Belisle: If they sent it through USPS, yes, you are protected.

    That didn’t stop Paypal from still charging me for an order I’d made, then cancelled, then got shipped regardless of cancelllation, though. A complaint to the postal inspectors brought no relief.

    I’m done with paypal. And that rule doesn’t seem to have any teeth … but if those CDs were shipped via US mail, it might actually get a judge to slap UMG.

  22. copious28 says:

    @scarletvirtue: yeah, exactly! just like those people that were sending back AOL cds! We can inundate them with all of Ashley Simpson’s cd!

  23. RandoX says:

    I got a promotional Oingo Boingo CD from a used store in the 90’s.

  24. CMU_Bueller says:

    @hypnotik_jello: Then the shop is likely violating UMG’s agreement as any CDs they receive, promotional or otherwise, are not unsolicited because selling UMG CDs would create a business relationship. He should be OK, because UMG’s beef should lie with the shop.

  25. zorville says:

    Um, my guess is that if it is being promoted by a major record label then it is not likely anything I want to hear anyway!

  26. scarletvirtue says:

    @mammalpants: “You kids, get off my lawn! And stop sharing my goddamn CDs with everyone!”

    @copious28: I love it. I’ve got a stack of CDs that I’ve listened to, and put into my iTunes rotation – I’ll start sending them back to the labels.

    Look out UMG, et al – I’m sending a hell of a lot of CDs your way!

  27. @Buran: If those CDs were shipped via US mail, it might actually get a judge to slap UMG.

    Hopefully. It’s invoked in Augusto’s motion for summary judgement:

    A.2.a UMG passed title to the CDs by operation of law under 35 U.S.C. § 3009.
    Under federal postal and competition law, UMG, by shipping unordered “promo CDs,” made a gift of the CDs to those who received them. The recipients thus had good title to the CDs, and were entitled to give or sell the CDs to the thrift stores, secondhand music shops, and eBay sellers from whom Augusto purchased them.

  28. bohemian says:

    So what are these radio stations supposed to do with these CDs if they can’t ever give them away, throw them away or return them to the record company?
    Are they bound by law to hold on to said CD for eternity? That seems to be what UMG is saying.

  29. harumph says:

    simple solution is to never accept any cd sent by umg. that would effectively prevent them from ever being played on the radio or being reviewed. fuck companies like this.

  30. metaled says:

    @scarletvirtue: … anytime I get one of those free/promotional CDs at a street fair or wherever, once I’m done with it – I’ll just send it back to the label.

    Be sure to send it back “Postage Due” (No stamp or return address), so they have to pay to get their property back. (send it to the CEO)

    Does this apply to Software as well? I have tons (and I mean TONS!) of AOL cd-roms that used to come a couple times a week dating back to the mid 1990’s.. Even though I was a member back then, they sent me promo trial discs trying to get me to sign up.. I have stacks of them I just couldn’t toss out, just thinking how many thousands of years they would be in a landfill (should have sent them out on re-writeable disks, so their recyclable).. I’d love to send them back on their dime, one at a time, once a week or so, so they can dispose of them properly! Corporations have to recycle their waste don’t they?

  31. jpleonard says:

    This is such BS. And about 25% of my collection have been stamped promo or has a hole in the barcode. I’ve purchased them from used CD stores, pawn shops, Ebay, Amazon, etc.

    I remember Garth Brooks and his alter ego tried to stop used CD sales before, saying that anytime a used CD is sold, he should he a cut off the money.

    What next, will Ford restrict you from selling a car to another person?

  32. LionelEHutz says:

    EFF rules.

  33. jpleonard says:

    @hi:

    ok, that wins.

  34. Jaysyn was banned for: http://consumerist.com/5032912/the-subprime-meltdown-will-be-nothing-compared-to-the-prime-meltdown#c7042646 says:

    Yeah, Universal has no chance on this one, too much prior case law.

  35. tmed says:

    I think that the record companies should develop some peer-to-peer electronic distribution system to avoid this.

  36. harshmellow says:

    @metaled: I read somewhere that those annoying free AOL CDs are about to become annoying free AOL flash drives! Pretty soon we will all have AOL flash drives (thumb drives, pen drives, whatever) arriving in our mailbox. Hello virus!!

    This whole thing is asinine–sorry UMG, you can’t make the rules for something you sent to me unsolicited.

    Hell, I bet these promo CDs are somehow a net gain in the world of record company creative bookkeeping, so what are you bitchin’ about UMG?

  37. Munsoned says:

    To all of those saying they want to send promotional CD’s back to the record label: following their logic, isn’t that also an “unauthorized distribution,” unless they gave you express permission to send them back?

  38. spinachdip says:

    @CMU_Bueller: What agreement? A record store’s order for CDs for sale is unrelated to the unsolicited promos they send to record stores and reviewers.

    There is no contractual agreement here – record stores send out CDs unsolicited hoping record stores will consider stocking them and writers will review them. They’re just hoping/pretending a sticker that says “for promotional use only” has any legal teeth.

  39. RandomHookup says:

    … giving or throwing them away are “unauthorized distributions”

    Mighty interesting grammar there.

  40. cde says:

    @RandomHookup: Exactly. To whom are you distributing the cds to if your throwing them out.

  41. cronomorph says:

    Music studios are so stupid. If they really wanted the “For promotional use only” verbage to mean anything they need to have some sort of tracking system in place.

    I worked at my college radio station, and work for a radio station conglomerate (not Clear Channel), and have a nice stack of albums and singles that are marked that way.

    In college if we didn’t put something in rotation it was up for grabs, though a large portion of those discs were for giveaways.

    At my current job there are crates of discs in the lunchroom, and once the musical higher ups are done with discs, they place them for us to glean over. Heck, there are guys who order multiple copies of stuff to send to family members. The music companies know this is happening. It’s foolish to stop it.

    Plus, this is the cheapest way to get singles and not have to bother with whole crappy albums.

  42. stinerman says:

    @Bladefist-미국사람:

    Actually most of the problems isn’t with theft but with copyright infringement.

    And if you’re a capitalist, you believe in free markets. Copyright is a government granted monopoly — hardly a free market.

    You can argue that copyright is necessary (the good outweighs the bad), but it has nothing to do with a free market. It’s just an incentive to get people to release their works which later become freely redistributable (after anywhere between 70 and 190 years)

  43. stinerman says:

    @snoop-blog:

    If your poo is copyrightable, you could use the same reasoning. As long as the styling is minimally creative (lets say you sculpt it a certain way), it would be eligible for copyright.

    The next step is enclosing a document that states the work is for promotional use only (writing “URGENT” on the box would be good as well). When they throw it away, you can file suit.

  44. spinachdip says:

    @stinerman: Not all capitalists believe in the free market. In fact, driving force in today’s economy is neoliberalism, the state pulling levers to help multi-national corporations.

  45. NotATool says:

    But, can I still use my unwanted promo CDs and AOL CDROMs as coasters?

  46. cde says:

    @NotATool: No, thats destruction of private property…

  47. DogTown says:

    If these discs accidentally burn up in a fire is UMG gonna consider it “unauthorized incineration”?

  48. scarletvirtue says:

    @DogTown: Oh, most likely. I wouldn’t put it past them.

  49. Grrrrrrr, now with two buns made of bacon. says:

    And in other news, UMG attempts to sue 375 trash cans, 421 dumpsters, and a landfill in western New Jersey.

  50. hossfly says:

    DANG….i knew if i kept that promo cassette from Pearl Jam, it would be worth SOMETHING one day….
    Wonder if i could get something for it on Fee-Bay……hhmmmm

  51. erica.blog says:

    Hrm. At the college newspaper, we got hundreds of free CD’s. We held contests regularly to see who could most creatively destroy them. I wonder if that violates the rules…

  52. CyberSkull says:

    @rmz: Why you gotta be mean to the sun?

  53. CyberSkull says:

    Help me make a wikipedia article on this lawsuit:

    en:Universal_Music_Group_v._Augusto

  54. In case anyone cares, the way the world of music contracts normally work, these promo CDs come out of the artist’s pocket. In a standard contract, there’s a part about promotion costs usually held against royalties. That includes advertising, video shoots, promo shwag and sending out promo CDs to radio, reviewers and tastemakers. The way it used to work, not sure if it still does, even record club sales were counted as promo.

    So anyway, UMG isn’t really out anything over this except a theoretical lost sale.

    And as many others have noted, ain’t no way this is ever going to stop. I hosted a radio show for about three years and would get, on average, 30-40 discs in the mail each week. I’ve been off the air for about a year and a half and I’ve only recently finally cleared all these promos out of the house. There are simply too many of these things going to so many people, it’s going to be impossible to police.

    Near the end, I did notice many people sending out CD-R copies of albums or just the CD with a card listing songs rather than retail art. If they want to make these things pretty much worthless, that’s the way to do it as no one is going to pay for a burn or a disc without art. Strangely enough, it was the indie labels mostly that did things this way. 95% of what I got from the big four was same as retail with maybe a sticker or punch hole in the bar code.

  55. TechnoDestructo says:

    @ndonahue:

    Unauthorized services as a gift makes me picture Universal as a squeegee bum yelling “I WASHED YOUR WINDSHIELD NOW YOU OWE ME TWO DOLLARS GIMME MY MONEY.”

  56. odhen says:

    I have a few promo CDs that I got used at a local store that say not to resell or give away or anything on them, so I wondered why the store bothered to mess with it, then I remembered I 99% of my music is on indie labels that probably don’t care.

  57. nacoran says:

    I had a promotional tape with a bunch of piano music on it once. It was my favorite tape. I accidentally left it in a pocket and it went through the washing machine. It ruined the tape and washed off the writing that would have helped me track down the individual tracks. I have it in a box somewhere in the hope that someday I’ll be able to run the warped sounds through enough filters that I can identify the performers. I guess it’s a good thing I didn’t throw it out. Wouldn’t want to illegally transfer it…

  58. cerbie says:

    @hi: a shiny metal disc with more information than they want to sell you in any format that is freely usable, which also doubles as a physical backup of that data.

    Sadly, if they were ejected to the sun, new ones would take their places. We’d still lose. Personally, I don’t see how they are going to get anywhere with this…but, they can afford the lawyers.

  59. lakecountrydave says:

    If the record companies are the rightful owners of these should not the person storing their property be entitled to compensation for storage and safe keeping? I have lots of these dating back in some cases 30 years. I accept payment in the form of cash (USD or Euros). My wife runs a music magazine and she gets mail totes of these things every week. They are not sent out for “free” out of the goodness of these companies hearts. They are sent with the hope of getting press or sales from of them.

  60. econobiker says:

    Hey, UMG I have a 45 rpm record from the 1970’s labeled “promotional only”. Care to come sue for it?

  61. Kazari says:

    Instead of record stores, radio stations and the general public stockpiling this CD-waste, we should have the government build a giant repository.

    They could put it in a giant tunnel in Nevada. There it would reside there forever, safe from the eBay, Russian MP3 gangs and rogue record store employees. They could call it Yucca Mountain.

    THAT would solve it!

  62. stinerman says:

    @spinachdip:

    Yeah, that’s neo-liberalism (aka corporate socialism), not capitalism.

  63. Hello_Newman says:

    It’s stuff like this that’s a public relations nightmare and it’s a complete lose-lose for the record company, nothing could could come of it. They don’t want the disks back, they just want to control anyone who has them.

  64. wellfleet says:

    @CMU_Bueller: I used to be a buyer for a major retailer and much of my collection is promo cds i got for free from UMG, Warner, EMI, SonyBMG, etc. I can keep them or give them away, but I can’t sell them. Same went fro free tickets to shows and other swag I got by the truckload. Plus, I would deem it highly unethical to seek gain out of something like that.

  65. Spooty says:

    An update: on June 10th, Augusto won the case. Essentially, the judge ruled that the CDs sent by UMG were indeed to be considered gifts, and that the first sale doctrine gave him the right to sell them if he wished.