Although it may seem similar to such accepted activities as selling off old CDs, vinyl records, and tapes at garage sales—or eBay—the Recording Industry Association of America (RIAA) says that reselling an iPod or MP3 player with music already preloaded on it is illegal.

In a statement made to MTV.com, the RIAA said that “selling an iPod preloaded with music is no different than selling a DVD onto which you have burned your entire music collection; either act is a clear violation of U.S. copyright law.” The RIAA went on to say that it will be monitoring the situation closely and that sellers need to be aware that this activity is infringement. The RIAA is in the process of making an agreement with eBay such that anyone who tries to sell a loaded iPod will get a warning.

This decision by the RIAA shows one major drawback with digital downloads over traditional physical media such as CDs, tapes, and vinyl: one cannot resell digital music once purchased. For example, a consumer who legally purchased twelve songs from iTunes can’t sell their music on an iPod or DVD. Conversely, the consumer who purchases a CD with twelve songs on it can resell the CD. The iTunes consumer cannot burn the purchased songs as an audio-CD to sell off since there is no way to tell if the CD-R is an illegal copy. Further, it is not clear if it is possible to resell the PC with the iTunes tracks still on it, since technically the iTunes account will still remain in the original owner’s name.

Generally, if a consumer is in proper possession of a copy of copyrighted material that has been lawfully made, that consumer can distribute that copy without violating the copyright holder’s copyright. That general rule would seem to suggest that there shouldn’t be a case against a consumer disposing of copies they made for personal use when one is getting rid of one’s own iPod. The RIAA disagrees.

Also raising questions is the sale of new iPods with preloaded content. TVMyPod sells video iPods preloaded with DVD content customers have already purchased. TVMyPod claims that its business model doesn’t run afoul of the Digital Millennium Copyright Act because it does not decrypt the DVDs to load them. And because the purchaser gets the original and the copy, the business is safe under fair use provisions of the U.S. Copyright Act. Another company, New York’s RipDigital, will rip consumer bought CDs for $1 apiece and load the music onto any digital music device a consumer purchases from them. The RIAA has yet to address these business models directly.