Submitted by J O as part of our contributors program.
News that Amazon has received a patent for the resale of digital goods has justifiably caused a stir in the technology and publishing press. ReDigi believes the Amazon patent is further proof that the secondary market is the future of the digital space and that there is no turning back. ReDigi is in the forefront of this trend, having launched the ReDigi Marketplace in 2011 with technology and a business model that are significantly different from the marketplace described in Amazon’s patent. The differences will be important as the marketplace develops, not just to the marketplace providers, but to artists, authors and copyright holders.
What did Amazon Patent?
As ReDigi understands Amazon’s patent, it is for a marketplace that employs a seller to buyer “copy and delete” mechanism, in which a user sells a “copy” of a digital good to another user while both the buyer and seller simultaneously own the copy (even if only for an instant in time), and then supposedly/subsequently the seller’s copy is “deleted.” ReDigi takes no position on the legality of this technique under copyright law, but simply notes that it has been central to the music and publishing industries’ skepticism and opposition to a “used” digital marketplace, and that the ReDigi Marketplace does not use this technique.
How is ReDigi’s technology and intellectual property different from the “used” marketplace Amazon intends to create, as described by their patent?
ReDigi’s advanced technology employs a “Verification Engine” and “Atomic Transaction”, resulting in a TRANSFER ONLY mechanism. This means that all digital goods are first verified to ensure that they are legally eligible for resale. Once verified, ReDigi’s technology transfers the “original” good from the user’s computer to ReDigi’s Cloud (Marketplace). With ReDigi’s method, only the “original” good is instantaneously/automatically transferred from seller to buyer without any copies. ReDigi then assists the seller, with an anti-virus like software application that monitors the seller’s computer and synced devices to ensure that any personal-use copies of the sold good are removed.
Why should artists, authors and copyright holders be concerned by Amazon’s approach used digital market?
Historically, Amazon has NEVER compensated artists, authors or copyright holders for the secondary sale of their goods, and they have sold billions of dollars worth of them. There is nothing in the Amazon patent that addresses this issue.
In contrast, the ReDigi model frees up billions of dollars of locked up wealth. It enables the participation of all parties from consumer to artist/author to copyright holder, in the profit chain. The nexus between the physical and digital marketplace can be defined by the emergence of a true secondary marketplace. ReDigi has managed to create just that, not only by solving the riddle of “original” content transfer, but by taking an enlightened step forward in bringing the artists and copyright holders back into the revenue stream.