Substitute for Purchasing Licensed Work – Example
Capitol Records, LLC v. ReDigi Inc., No. 16-2321 (2d Cir. 2018) - ReDigi designed an online marketplace for people to resell digital music files purchased from iTunes. ReDigi’s system made copies of digital music files owned by record labels. ReDigi then sold those copies to secondary buyers at a lower price than iTunes. ReDigi’s copies were sold to the same consumers whose purpose in purchasing was to acquire the labels’ music.
Not a Substitute for Purchasing Licensed Work – Example
Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984) - Sony sold home videotape recorders, which viewers used to record television broadcasts in order to watch them later, a practice known as "time-shifting." The television broadcasts were free to the public. The Court found that harm from time-shifting was minimal at best.