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The 'rights' of the artist are 'sold' within the purchase of the Original CD....the local rights of 'fair use' pertain to the copying of that CD for purpose of backup....when the original is stolen, so too is stolen your rights to the backup.
I say 'local rights' as 'fair use' is encompassed within US Copyright/s but not, for example in Australian Law.
Purchase of second hand 'originals' is the same as giving a CD as a present to a third party.....the first purchase is where the royalties are 'included'. Subsequent transactions don't attract royalty.
The burnt copy is specifically personal use for the purchased copy holder....the latter is stolen then the former becomes intrinsically illegal to continue to hold...
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