Universal Music Group (UMG) regularly ships free, unsolicited promotional CDs to music critics and others. The labels state that they are “the property of the record company” and for “Promotional Use Only—Not for Sale.” When Troy Augusto sold some of the CDs through online auction sites, UMG filed a complaint in a federal district court, alleging copyright infringement. UMG argued that it had only licensed the CDs to the recipients and that ownership had not transferred to Augusto. Could Augusto sell, or otherwise dispose of, the CDs?
Explain. [UMG Recordings, Inc. v. Augusto, 628 F.3d 1175 (9th Cir. 2011)]
