ReDigi Adds New Funding For Used MP3’s, Capital/EMI Demands User Names

(UPDATES) Used digital music marketplace ReDigi has raised $760,000 in venture debt financing, according to a new Securities Exchange Commission filing.  No details of the investment were released, but previously ReDigi had raised $535,000 from 21 investors according in April 2011.  Much of ReDigi's funding may be going to lawyers, as the company fights for protection under federal first sale doctrine. That battle took a new turn recently that could result in fans being dragged into the courtroom.

Capital Records / EMI is now seeking a court order from U.S. District Court Judge Richard Sullivan in New York that would force ReDigi to disclose the identity of its users. Sullivan previously agreed to the turnover, but ReDigi has vowed to fight the action. If approved, Capital would presumably contact users to build their case.  In the meantime, users may choose to avoid the service altogether rather than risk identification or even prosecution.

Corynne McSherry, a lawyer with the digital liberties group Electronic Frontier Foundation, argues that Capital/EMI's requests are too broad. "This is really quite concerning," McSherry told MediaPost. "It's not clear to me why Capitol actually needs all this information."