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They'd still be obligated to uphold laws that protect themselves. As far as I know, it's against the law to do what this record store is promoting.

First, retaining a copyright is not the same as defending from illegal use. For example, people are not required to press charges against people who hit them, even though battery is still illegal. And just because they didn't one time doesn't mean they wouldn't be able to the next time.

Second, I seriously doubt that it's illegal to do what the record store is doing. Record stores have sold used CDs forever, and, even before MP3, people were copying them before reselling. Also, all sorts of stores have open-box products available for sale all the time.

I understand where you're coming from, but if everyone involved is getting what they want and making more money, where's the harm?
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Bitt Faulk