Capitol Records, LLC v. Redigi Inc.

Filing 303

DEFENDANTS COUNTER STATEMENT PURSUANT TO LOCAL RULE 56.1. ***Certificate of Service attached hereto. (This document was previously filed under seal in envelope #85 and unsealed on 12/20/2016.) (Attachments: # 1 Certificate of Service)(mro)

Gary P. Adelman, Esq.
MEISTER SEELIG & FEIN LLP
Attorneysþr Defendant ReDigi Inc.
Two Grand Central Tower
140 East 45th Street, lgth Floor
New York, New York 10017
(212) 6ss-3s80

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

--------x
CAPITOL RECORDS,LLC,

DEFENDANTS COUNTER
STATEMENT PURSUANT TO
LOCAL RULE 56.1

Plaintiff,

Civil Action No:

- against -

REDIGI,INC.

12

CIV 0095

(RJS)

,

:*i1

_________x

Pursuant to Local Civil Rule 56.1 Defendant, ReDigi, Inc. ("Defendant,, or..ReDigr,')
by

its undersigned counsel, submits this response to plaintiff capitol Records, LLC,s (..plaintiff,or

"capitol") Local Rule 56.1 Statement (the "capitol,s Rule 56.1 Statement',).r

t
I

LOCAL CIVIL RULE 56.1 (b)

The "Adelman Decl." shall refer to the Declaration of Gary Adelman dated August
14,2072
together with the exhibits annexed thereto. The "Rogel Decl." shall refer to the Declaration
of
T-'awrence S. Rudolph (Rogel) dated August 74,2072. The "Ossenmacher
Decl.,, shall refer to
the Declaration of John Ossenmacher dated August 14,2072. The,,7/20112 Adelman
Decl.,,
shall refer to the Declaration of Gary Adelman dated July 20,2012 together with the
exhibits
annexed thereto (Docket No. 57). The"7/20/12 Rogel Decl." shall reier to the
Declaration of
Lawrence S. Rudolph (Rogel) dated July 20,2012 (Docket No. 58). The..Worth Decl."
shall
refer to the Declaration of Colin Worth dated July 20,2012 (Docket No. 59). The ,.Lin
Decl.,,
shall refer to the Declaration of Jonathan Lin dated July 20,2012 (Docket Ño. 60). .,RSUF,,
shall
refer to ReDigi's Statement of Undisputed Facts Pursuant to Local Civil Rule 56.1 (Docket
No.
s6).

In accordance with Local Civil Rule 56.1(b) ReDigi sets forth the following additional
material facts:

A.

The Creation of ReDigi

1.

ReDigi was founded to find away for people to lawfully gift their digital music to

people in need who could not afford to buy music, and to provide a donation service so that
people would not steal digital music. ReDigi's founders believe that "music is good for the soul
and makes people feel

better." See Adelman Decl., 8x.2, OssenmacherTr.25:73-25,26:2-75,

27-28;Adelman Decl., Ex. 1, Rogel Tr. 30:1-19.

2.

After some focus groups, the concept evolved into

a marketplace because the

focus groups revealed that people would not really utilize the service if it could only be used for
donation.,Se¿ Adelman Decl., Ex. 2, Ossenmacher Tr. 67 :8-25, 68:2-4.

3.

ReDigi's research found that if individuals could buy or sell music on the site they

would be coming more regul arly and it would have a more robust user base. S¿e Adelman Decl.,
Ex. 2, Ossenmach er Tr.

4.

67 :8-25 , 68:2-4.

As ReDigi developed it quickly grew into a service that would provide a

marketplace for individuals to re-sell their legally purchased digital goods. See Adelman Decl.,

Ex. 2, Ossenmacher Tr.,

B.

67

:2-25-68:2-4.

ReDigi's Research

5.

As its founders began delving into whether their idea would fit within the

confines of copyright law, they discovered the first sale doctrine.

^See

Adelman Decl., 8x.2,

Ossenmacher Tr., 29:2I-30:20. ReDigi's founders researched copyright law, consulted

with

attorneys and felt that under the first sale doctrine they could provide a legal market place for

digital goods if they had the right technology

-

the kind of technology that could effectuate

2

uploads and sales within the confìnes of copyright law.

,S¿¿

Adelman Decl., p;x.2, Ossenmacher

Tr. 29-32, 38-44, 7 0-77 .

6.

Ossenmacher and Rogel also explored existing technologies, but quickly came to

the conclusion that the exact technology to make this process work within the confines of the law
was not readily available -- so ReDigi set out to develop a technology that would be compliant

with copyright law.
7

'

,s¿e

Adelman Decl., F;x.2, ossenmacher Tr., 3l:5-14.

ReDigi's founders thought extensively about the boundaries of copyright law,

looked at other legally existing technologies and transfer methods, researched existing case law
and tried to create a legally compliant system, which would also help prevent piracy. See

Adelman Decl., 8x.2, Ossenmacher Tr., atl5-78.

8.

ReDigi's service is nothing like peer-to-peer file sharing networks. In file sharing

networks copies of one file are cut and transferred to millions of people. See Adelman Decl., Ex.
2, Ossenmacher Tr. 78.

9.

The ReDigi system was designed from the ground up to provide a service that was

compliant with copyright law.

10'

Adelman Decl., 8x.2, ossenmacher Tr. 3l:4-14.

,Se¿

ReDigi's purpose was never to help people commit acts of piracy. In fact,

appalled by the widespread piracy that has taken place in the music industry, ReDigi's founders

actively sought to design a system that would discourage piracy. See Adelman Decl., 8x.2,
Ossenmacher Tr. 18:3-25,79:2-17

i 1.

.

ReDigi's founders intention by creating

a service that functioned as

donation

service and a secondary marketplace for digital music was to provide incentives for legally
purchasing music.

^see

Adelman Decl., Ex. z, ossenmacher Tr. 2g:7-r9,7g-7g.

12.

In fact

a

major benefit of providing a marketplace for the resale of legally verified

and purchased digital music is a significant discouragement to

piracy. The idea is that if people

find that their legally acquired music has real "resale" value they are more often willing to make
the purchase knowing that they can resell the music

if they don't like it or grow tired of it. Also,

the secondary market attracts the value buyer who may not be interested in purchasing a music

track for $1.29 through iTunes, but would purchase

a

previously owned track for half that

amount. Ossenmacher Decl. fl3.
13.

There are possible differences between new and used digital tracks. ReDigi sells

digital tracks on a first in first out basis, meaning that if a person wants to buy a particular song,
and they click on the purchase button, they buy whatever quality of the song that another user
has offered for sale. Because ReDigi sells the actual music file that was legally purchased, a

buyer gets whatever quality, whether lower or higher that the original purchaser bought.

,See

Adelman Decl., F;x.2, Ossenmacher Tr. 208-210.
14.

Additionally, ReDigi discourages piracy by providing ongoing value to lawfully

acquired digitally downloaded music. One of the factors contributing to widespread digital music
piracy is that individuals do not view digital music as a type of personal property that has value,
the secondary market changes this forever. Ossenmacher Decl. !f4.
15.

without

a secondary marketplace

for digital goods

a

lawful buyer, consumer, has

no ability to exercise their right to commerce and to sell their lawfully acquired property, the

digital good will take up disk space or be deleted, there was no other alternative until our service
was launched. Ossenmacher Decl. fl5.

16.

Like the eBay and Amazon marketplaces for used CD's, it is proven that when

consumers receive value for their personal property, in this case digital property, they are more

likely to protect it, they are less likely to steal it. As a result of this software and marketplace

a

person who legally purchases digital music can gift, sell or donate that music. Ossenmacher

Decl. tf5.

17.
just

as

Showing consumers that legally acquired digital personal property has real value

their other personal property like CD's and vinyl records. Ossenmacher Decl. fl5.

C.

ReDigi's Efforts to Eliminate the Potential for Misuse

18.

ReDigi's founders further sought to minimize the incentive individuals would

have to try to misuse the system for an illegal purpose by making ReDigi a closed system. See

Adelman Decl., F;x.2, ossenmacher Tr. 94:20-25,96:2-17, 175:3-25, 176:2-27. In a closed
system, users can only put money into they system, there is no way to cash money out. Id.

ReDigi users can buy credits within the ReDigi system that they can utilize to buy digital music.

1d Users can also sell their digital music and receive credit. Id. However credit received for the
sale of music cannot be cashed out of the system for money. Users are only allowed to buy other

music with the credit they purchased or earned. Id.

19.

The closed system was also done at the suggestion of some of the record labels

who, during discussions with ReDigi thought it would be a good idea to keep the money "in the
music ecosphere."

20.

,See

Adelman Decl., F;x.2, OssenmacherTr. 99:76-25, 100:2-8.

ReDigi's discussions with the record labels stemmed from their attempt to get

input, get marketing support and enter into deals with the labels so that ReDigi could sell new
content.

,S¿¿

21.

Adelman Decl., 8x.2, Ossenmacher Tr. 102-103,231-233.

During ReDigi's discussions with the labels, none of the labels ever raised a

concern about the legality of ReDigi's service. See Adelman Decl., Ex. 2, Ossenmach er Tr. 102103.

22.

Originally however ReDigi had planned to limit the use of credits earned from the

sale of used music, so that those credits could only be used to purchase new music. Now credits
can be used to purchase other used music because ReDigi does not have the authorization to sell

new music from the labels. S¿e Adelman Decl., F;x.2, Ossenmacher Tr. 99:16-25.
¿J.

In addition, ReDigi's founders took the time to think about the potential ways

their service could be abused and have taken active steps to prevent copyright infringement
outside of its marketplace and prevent users from committing acts of infringem ent. See Adelman

Decl., 8x.2, Ossenmacher Tr. 33-34, 175-176.
24.

Prior to ReDigi's existence, there was already possibility that individuals who

legally purchased music, could commit acts of copfight infringement. See Adelman Decl., Ex.
2, Ossenmacher Tr. 33-34. By way of example, even when digital music was only distributed

physically in CD's, an individual could go to Best Buy, purchase a CD, go home and rip the
contents of the CD to their iTunes library and/or make a copy to another CD. Notwithstanding

the potential illegality of making reproductions of the CD, that person could then go to a used
record store and re-sell the CD. The store would not know or be able to prevent the user from
then selling the CD. The possibilit¡' 1¡u1 the above type of infringement could take place is the
s

tatus quo. See Adelman Decl., 8x. 2, Ossenmach er Tr.
25.

33 -3 4.

ReDigi sought to decrease the status quo posslbility of infüngement by building a

system that was superior for protecting copyright than what existed in the marketplace at the

time. See Adelman Decl., 8x.2, Ossenmacher Tr. 34.
26.

ReDigi also utilizes its user agreement to prohibit extraneous acts of copynght

infringement. See Adelman Decl., Ex. 2, Ossenmach er Tr. 3 6-31

.

2l.

Even though individuals are ultimately responsible for their own compliance with

copyright law, ReDigi has taken the initiative to not only educate consumers about copyright
law, but to use technology to prevent infringement, in an area where there is little enforcement.
^S¿e

Adelman Decl., 8x. 2, Ossenmach er Tr. 3 6-37 :2- 1 4.

28.

In fact the object of some of ReDigi's marketing materials was to educate

consumers as to why ReDigi believed its service was legal.
Ossenmacher

29.

Tr.

,See

Adelman Decl., F;x.2,

151.

To use the ReDigi system for storage or sale, users must download ReDigi's

proprietary Media Manager software, which analyzes all music files residing on a user's hard
drive to determine which songs were legally purchased by that user from iTunes.

30.

^See

RSUF tf8.

After Media Manager is downloaded and it continuously scans a user's hard

drive, connected devices, such as portable media players, flash drives, backup drives, as well as
any the database for iTunes which tracks files on wirelessly connectable devices that sync with
iTunes, Google Cloud and any other cloud storage services for which local folders are

maintained on a user's hard drive, such as DropBox. Music Manager's ability to scan connected
devices does not always require that the device be physically connected to the user's computer.

Now with iCloud and iMatch, purchased music is often wirelessly synched with user's connected
devices. Music Manager is able to detect where copies of a particular song could have been sent

by constantly scanning the iTunes library, which is slmced with the user's computer. See
Adelman Decl., Ex. 1, Rogel Tr. 103-125.

31.

Connecting portable media devices is routine and normal use.

Ex. 2, Ossenmacher Tr. I 62.

,See

Adelman Decl.,

32.

It is harder to "game" the ReDigi system than anything in the physical world.

,See

Adelman Decl., F;x.2, Ossenmacher Tr. 775.
JJ.

If a copy of

a song that was uploaded for sale is found by Music Manager, the

ReDigi system reminds the user that it is no longer allowed to retain that copy and requests that
the copy be deleted. If a user refuses to delete the retained copy and/or after the user has failed

to comply that user's account is suspended and their credit is revoked.

,See

Adelman Decl., Ex.

1,

Rogel Tr.152-155.
34.

Even after implementing numerous technological safeguards and restraints to try

to prevent the possibility of abuse, ReDigi has also built the "Legalize Me" button which is tool
that its users could click that would delete all unlawfully obtained music files from their
computer. S¿e Adelman Decl., F,x.2, Ossenmacher Tr. 100:11-25, 101:2-5.

35.

ReDigi also planned to offer a second button, so that ReDigi's software would go

into the marketplace and replace the user's illegally obtained music with lawfully obtained files,
whether new or used depending on the availability of the track. Id.z
36.

ReDigi never believed that its service was or is unlawful. Although in its

subscription agreements ReDigi disclosed to potential investors that litigation was a risk, it was a
forward looking potential issue which was raised only because a service like ReDigi had never
been done before.

D.

,s¿¿

Adelman Decl., Ex. 2, ossenmach er Tr. r37, 151-154.

Capitol's Has Misinterpreted ReDigi's Previous Statements
37.

As explained at length in the deposition of John Ossenmacher, the statement in

ReDigi's brief in opposition to Capitol's motion for

No'

2

14) has been wholly taken out of context by

a

preliminary injunction on page 9 (Docket

Capitol. The statement referenced the fact that

ReDigi cannot presently offer the second option as it does not sell new music at this time.
8

ReDigi's system used to be programmed to make a duplicate archival copy of an Eligible File on
the user's hard drive for recovery purposes. S¿¿ Adelman Decl.,

Ex.2, Ossenmacher Tr. 44:20-

25-46:2-18. At the time the preliminary injunction opposition was drafted John Ossenmacher
understood this statement to refer to the archival copy that the system could have been making.
S¿e

Adelman Decl., F;x.2, Ossenmacher Tr. 53-54. ReDigi had already been using the migration

method for some time at that point and had even discussed the general technique during
presentations with some of the other major record labels.
Ossenmacher Tr. 266-267
38.

,S¿¿

Adelman Decl., Ex.2,

.

Additionally, the word "copies"

as used

in ReDigi's materials was not always

used to describe ReDigi's technology. See Adelman Decl.,

8x.2, Ossenmacher Tr. 190:22-25-

191:2-6. Just as one goes to the record store to get a 'copy' of a new or used album, one can go
to ReDigi to get a "copy" of a song.

Id. However in this sense the word copy is not used to

describe the technology or indicate that a reproduction or duplication was ma<1e or sold, rather
is

it

just a colloquial usage of the word "copy", which is commonplace in the music industry. 1d
39.

The phrase "such file" from paragraph 47 of the Answer and paragraph 6 of the

January 27,2012 Declaration of Larry Rudolph has also been taken out of context. This phrase

refers to the archival copy that could have previously been created for recovery pu{poses, it does
not refer to the Eligible File.
^\ee Rogel Decl. uJ[4-5. This was obvious by reading the following
statement that

"[i]f

the user were to attempt to upload the file without first accepting the prompt

to delete the other copy or copies detected by Music Manager, the upload would be blocked."
(Emphasis Added.) See 1/27/12 Rudolph Decl., fl6. This clearly refers to the archival copy and
any previously existing copies that existed on the user's hard drive.

40.

There are many instances in which a pre-existing copy of an Eligible File would

exist on a user's hard drive prior to ReDigi's installation. See 1120/12 Rogel Decl. fl30; RSUF
1l1t2e.

41.

ReDigi's system is highly technical and complicated and in opposing the motion

for a preliminary injunction, ReDigi sought to explain to the Court in the best way possible how
its system worked. However without

a

protective order in place, ReDigi was also concerned

about going into detail as to the details and workings of its technology, as it is highly sensitive,

proprietary information. Also sometimes colloquial language is used because highly technical
processes are

difficult to explain and/or would expose ReDigi's proprietary information.

Se¿

Rogel Decl., !f6; Adelman Decl., 8x.2, Ossenmacher Tr. 50-51.
42.

To the extent that the patent application uses the word "copied," this was not

meant to describe ReDigi's migration process. ReDigi's patent sought protection for its
business process, not over the specific method of uploading files to the cloud. Moreover at the

time the patent was filed, prior to ReDigi's launch, the data migration program was not finished.
,See

Rogel Decl., fl9.
43.

In executing many different user commands, computers move the location of files

all the time. For example, computers move the location of electronic files when they go through
defragmenting processes or when a person moves their music files from one directory to another
because they want to use a nerv media

player. Many editors often make backup copies of files

(even editing the MP3 tags, such as changing the ratings or title of the track may cause

it to be

copied). Installing a new music player on a machine (which changes the default music player)
and double clicking on a music file may make a copy of the file. See Rogel Decl., fl7.

10

44.
a process

ReDigi has not engaged in any volitional conduct. ReDigi's system does not have
of human review of Eligible Files prior to upload. ReDigi's employees have no direct

oversight over which files are uploaded to ReDigi's marketplace by users. ReDigi also has no

control over which songs content owners sell through iTunes or for that matter which Eligible
Files users will choose to upload. See Rogel Decl., tf8

II.

REDIGI'S RESPONSE TO CAPITOL'S RULE 56.1 STATEMENT

1.

ReDigi does not dispute the assertions contained in paragraph 1 of Capitol's Rule

56.1 Statement.

2.

ReDigi does not dispute the assertions contained in paragraph2 of Capitol's Rule

56.1 Statement.

3.

ReDigi does not dispute the assertions contained in paragraph 3 of Capitol's Rule

56.1 Statement.

4.

ReDigi does not dispute the assertions contained in paragraph 4 of Capitol's Rule

56.1 Statement.

5.

ReDigi does not dispute the assertions contained in paragraph 5 of Capitol's Rule

56.1 Statement.

6.

ReDigi does not dispute the assertions contained in paragraph 6 of Capitol's Rule

56.1 Statement.

7.

ReDigi does not dispute the assertions contained in paragraph 7 of Capitol's Rule

56.1 Statement.

8.

ReDigi does not dispute the assertions contained in paragraph 8 of Capitol's Rule

56.1 Statement.

ll

9.

ReDigi does not dispute the assertions contained in paragraph 9 of Capitol's Rule

56.1 Statement.

10.

ReDigi does not dispute the assertions contained in paragraph 10 of Capitol's

Rule 56.1 Statement.

11.

ReDigi does not dispute the assertions contained in paragraph 11 of Capitol's

Rule 56.1 Statement.

12.

ReDigi does not dispute the assertions contained in paragraph 12 of Capitol's

Rule 56.1 Statement.

13.

ReDigi does not dispute the assertions contained in paragraph 13 of Capitol's

Rule 56.1 Statement.

14.

ReDigi disputes the assertions contained in paragraph 14 of Capitol's Rule 56.1

Statement. ReDigi's employees have no oversight over which files are uploaded to ReDigi's
marketplace by users.
S¿¿

,See

Rogel Decl., flS. Eligible Files are determined by Media Manager.

RSUF fl8. Additionally ReDigi has no control over which songs content owners sell through

iTunes or for that matter which Eligible Files users will choose to upload.

15.

,See

Rogel Decl., tf8.

ReDigi does not dispute the assertions contained in paragraph l5 of Capitol's

Rule 56.1 Statement.

16.

ReDigi does not dispute the assertions contained in paragraph 16 of Capitol's

Rule 56.1 Statement.

17.

ReDigi does not dispute the assertions contained in paragraph 17 of Capitol's

Rule 56.1 Statement.

18.

ReDigi disputes the assertions contained in paragraph 18 of Capitol's Rule 56.1

Statement. The Eligible File which is uploaded to the Cloud Locker is not deleted from the

12

user's hard drive after being uploaded because the file has been migrated and is no longer on the
user's hard drive.

19.

^See

RSUF 1[1114-22,31.

ReDigi disputes the assertions contained in paragraph 19 of Capitol's Rule 56.1

Statement. The Eligible File which is uploaded to the Cloud Locker is not deleted from the
user's hard drive after being uploaded because the file has been migrated and is no longer on the
user's hard drive. .l¿¿ RSUF fl1[14-22,31.

20.
Statement as

ReDigi disputes the assertions contained in paragraph20 of Capitol's Rule 56.1

it is ambiguous and not understandable in its current form. ReDigi does not

understand what Capitol means by this statement.

21.

ReDigi does not dispute the assertions contained in paragraph2l of Capitol's

Rule 56.1 Statement.

22.

ReDigi does not dispute the assertions contained in paragraph22 of Capitol's

Rule 56.1 Statement.
23

.

ReDigi disputes the assertions contained in paragr aph 23 of Capitol 's Rule

5

6.

1

Statement. First, the implication that ReDigi prompts the upload of an Eligible File to the
Cloud Locker, as only a user can choose to request to place an Eligible File in the Cloud Locker
and secondly that the music

file does not always begin on the users hard drive of their physical

computer, and does not always have to be migrated.

24.

,See

RSUF

'1T12,

RSUFt40-41.

ReDigi disputes the assertions contained in paragraph24 of Capitol's Rule 56.1

Statement, specifically the assertion that the upload takes several seconds. See RSUF fl22;

Adelman Decl., Ex. 1, Rogel Tr. 70:10.
25

.

ReDigi does not dispute the assertions contained in paragr aph 25 of Capitol's

Rule 56.1 Statement.

13

26.

ReDigi disputes the assertions contained in paragraph26 of Capitol's Rule 56.1

Statement. Although the quoted statement was contained in ReDigi's opposition brief to
Capitol's motion for a preliminary injunction Capitol has misinterpreted the meaning of this
statement. See $I, 11n37-41, supra.

21.

ReDigi disputes the assertions contained in paragraph2T of Capitol's Rule 56.1

Statement. ReDigi has not applied for patent protection to protect all of its' technology. In fact
its original application discussed during the deposition of Rogel, only sought protection for its
business process not over the specific method of uploading files to the cloud. ,See $I, 1n42,

supra.

28.

ReDigi does not dispute the assertions contained in paragraph23 of Capitol's

Rule 56.1 Statement.

29.

ReDigi does not dispute the assertions contained in paragraph2g of Capitol's

Rule 56.1 Statement.

30.

ReDigi disputes the assertions contained in paragraph 30 of Capitol's Rule 56.1

Statement. The patent application referenced does not protect all of ReDigi's technology. In
fact its original application discussed during the deposition of Rogel, only sought protection for
its business process not over the specific method of uploading files to the cloud. ,See $1, nn42,
supra.

31.

ReDigi does not dispute the assertions contained in paragraph 31 of Capitol's

Rule 56.1 Statement.

32.

ReDigi does not dispute the assertions contained in paragraph3} of Capitol's

Rule 56.1 Statement.

t4

33.

ReDigi does not dispute the assertions contained in paragraph 33 of Capitol's

Rule 56.1 Statement.

34.

ReDigi does not dispute the assertions contained in paragraph34 of Capitol's

Rule 56.1 Statement.

35.

ReDigi does not dispute the assertions contained in paragraph 35 of Capitol's

Rule 56.1 Statement.

36.

ReDigi does not dispute the assertions contained in paragraph36 of Capitol's

Rule 56.1 Statement.

37.

ReDigi does not dispute the assertions contained in paragraph3T of Capitol's

Rule 56.1 Statement.

38.

ReDigi does not dispute the assertions contained in paragraph 38 of Capitol's

Rule 56.1 Statement.

39.

ReDigi does not dispute the assertions contained in paragraph 39 of Capitol's

Rule 56.1 Statement.

40.

ReDigi does not dispute the assertions contained in paragraph 40 of Capitol's

Rule 56.1 Statement.

4I

.

ReDigi does not dispute the assertions contained in paragr aph

4l of Capitol' s

Rule 56.1 Statement.

42.

ReDigi disputes the assertions contained in paragraph42 of Capitol's Rule 56.1

Statement. The purpose of promotions was to build an inventory by gaining users. ^lee Adelman
Decl., 8x.2, Ossenmacher Tr., 248:11-2I.

43.

ReDigi does not dispute the assertions contained in paragraph 43 of Capitol's

Rule 56.1 Statement.

15

44.

ReDigr does not dispute the assertions contained in paragraph 44 of Capitol's

Rule 56.1 Statement.

45.

ReDigi does not dispute the assertions contained in paragraph 45 of Capitol's

Rule 56.1 Statement.

46.

ReDigi does not dispute the assertions contained in paragraph46 of Capitol's

Rule 56.1 Statement.
47

.

ReDigi does not dispute the assertions contained in paragraph 47 of Capitol's

Rule 56.1 Statement.

48.

ReDigi does not dispute the assertions contained in paragraph 48 of Capitol's

Rule 56.1 Statement.
49

.

ReDigi does not dispute the assertions contained in paragr aph 49 of Capitol'

s

Rule 56.1 Statement.

50.

ReDigi does not dispute the assertions contained in paragraph 50 of Capitol's

Rule 56.1 Statement.

51.

ReDigi does not dispute the assertions contained in paragraph 51 of Capitol's

Rule 56.i Statement.

52.

ReDigi disputes the assertions contained in para-graph 52 of Capitol's Rule 56.1

Statement. This "guesstimate" was not based upon actual knowledge and therefore cannot be
admitted as an undisputed fact. See Adelman Decl., Ex.

53.

l,

Rogel Tr.,82,83:17-25,84:2.

ReDigi disputes the assertion contained in paragraph 53 f Capitol's Rule 56.1

Statement. The file that is maintained in the Cloud Locker after purchase is the Eligible File not
a copy

of the Eligible Flle. See RSUF fl53. The copy that is downloaded is a Personal Use

Copy.ld.

I6

54.

ReDigi does not dispute the assertions contained in paragraph 54 of Capitol's

Rule 56.1 Statement.

55.

ReDigi does not dispute the assertions contained in paragraph 55 of Capitol's

Rule 56.1 Statement.

56.

ReDigi does not dispute the assertions contained in paragraph 56 of Capitol's

Rule 56.1 Statement.
57

.

Statement.

ReDigi disputes the assertions contained in paragraph 57 of Capitol's Rule 56.1
Ossenmacher

58.
Statement as

Tr. 155,157-159; Rudolph Tr. 102-103.

ReDigi disputes the assertions contained in paragraph 58 of Capitol's Rule 56.1

it

has been

wholly taken out of context. Mr. Rogel's quoted portion of text was part

of a larger statement made by Mr. Rogel during his deposition discussing the "great lengths"
ReDigi has gone to be sure that their verification is as solid as it can be. See Adelman Decl., Ex.
1, Rogel

Tr. 93:11-21.

59.

ReDigi does not dispute the assertions contained in paragraph 59 of Capitol's

Rule 56.1 Statement.

60.

ReDigi does not dispute the assertions contained in paragraph 60 of Capitol's

Rule 56.1 Statement.

61.

ReDigi does not dispute the assertions contained in paragraph 61 of Capitol's

Rule 56.1 Statement.

62.

ReDigi disputes the assertions contained in paragraph 62 of Capitol's Rule 56.1

Statement. Although many things are possible, the probability of this scenario is very
user would not benefit from such a transaction as there is no way to get cash out of
$1,

1T18,

supra. The user can only use the credits earned to buy music.

17

1d.

low. A

ReDigi.

,See

63.

ReDigi does not dispute the assertions contained in paragraph 63 of Capitol's

Rule 56.1 Statement.

64.

ReDigi does not dispute the assertions contained in paragraph 64 of Capitol's

Rule 56.1 Statement.
65

.

ReDigi does not dispute the assertions contained in paragr aph 65 of Capitol's

Rule 56.1 Statement.

66.

ReDigi disputes the assertions contained in paragraph66 of Capitol's Rule 56.1

Statement. In fact the object of some of ReDigi's marketing materials was to educate consumers
as to

why ReDigi believed its service was legal. See gI,
67

.

111127

-28, supra.

ReDigi disputes the assertions contained in paragræph 67 of Capitol's Rule 56.1

Statement. In fact the object of some of ReDigi's marketing materials was to educate consumers
as to

why ReDigi believed its service was legal. See gI,

68.

111[27-28, supra.

ReDigi does not dispute the assertions contained in para.graph 68 of Capitol's

Rule 56.1 Statement.
69

.

ReDigi does not dispute the assertions contained in paragr aph 69 of Capitol's

Rule 56.1 Statement.

70.

ReDigi does not dispute the assertions contained in paragraphT0 of Capitol's

Rule 56.1 Statement.

71.

ReDigi disputes the assertions contained in paragraphTl of Capitol's Rule 56.1

Statement and refers the Court to the spreadsheets as the best evidence of the number of tracks

contained on each. ^l¿e Mandel Decl., Ex.

M. Capitol

should not rely on Mr. Rogel's

guesstimations as to how many of Capitol's own recordings have been identified from

18

information from the ReDigi system when it has all of the information to accurately determine
these numbers and is

72.

in the best position to do so.

ReDigi disputes the assertions contained in paragraphT2 of Capitol's Rule 56.1

Statement and refers the Court to the spreadsheets as the best evidence of the number of tracks

contained on each. SeeMandel Decl., Ex.

M.

Capitol should not rely on Mr. Rogel's

guesstimations as to how many of Capitol's own recordings have been identified from

information from the ReDigi system when it has all of the information to accurately determine
these numbers and is

73.

in the best position to do

so.

ReDigi does not dispute the assertions contained in paragraphT3 of Capitol's

Rule 56.1 Statement.
Dated: New York, New York
August 74,2012

Respectfully submitted,

KAe

MEISTER SEELIG & FEIN LLP

Gary Adelman, Esq.

Attorneys for Defendant ReDigi Inc.
140 East 45th Street,Igth Floor
New York, New York 10017

Telephone: [phone]
E-mail : [e-mail]

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