Came across this report in FMQB:
RIAA Bans The Reselling Of iPods With Preloaded Music
February 10, 2006
Although it may seem like a feasible idea, the Recording Industry Association of America (RIAA) says that reselling an iPod or MP3 player with music already preloaded on it is illegal.
"Selling an iPod preloaded with music is no different than selling a DVD onto which you have burned your entire music collection," the RIAA said in a statement to MTV.com. "Either act is a clear violation of U.S. copyright law. The RIAA is monitoring this means of infringement. In short: seller beware." Many people have been selling their used iPods online with thousands of songs preloaded on them.
Andrew Bridges, a lawyer for eBay that specializes in copyright and trademark law, told MTV.com, "It really depends on individual circumstances. I'm not sure the law is settled. If I'm a college student and I want to supplement my income by buying 100 iPods and selling them at a significant premium, that's probably not going to fly. But if I've had my iPod Shuffle for two years and I'm tired of it and I go out and buy a 60 gig video iPod and want to sell my old Shuffle, but don't want to purge the music first, that's probably legal."
Keywords: copyright download upload peer to peer p2p file sharing filesharing music movies indie label freeculture creative commons pop/rock artists riaa independent mp3 cd favorite songs