The EFF said the "first sale" doctrine in copyright law stipulates that the owner of a CD is entitled to resell it without the permission of the copyright holder.
"Universal is mistaken if it thinks that it can trump these rights simply by putting a label on a CD," said EFF senior intellectual property attorney Fred von Lohmann.
"Unless this effort is blocked, it could jeopardize not only sales of used CDs, but also libraries, used bookstores, and businesses that rent movies and video games."
Universal sued eBay seller Troy Augusto in May for copyright infringement, and sent takedown notices under the Digital Millennium Copyright Act to eBay, which suspended Augusto's CD auctions.
The EFF on Monday countersued Universal for sending "bogus" takedown notices.
UPDATE: Universal Music Group provided the following statement:
"The EFF has its facts and the law wrong. Mr. Augusto was selling promotional CDs that were the property of the record company, were licensed for personal use only, and were not permitted to be sold, as is clear from the plain language on the CDs.
Thus, the first sale doctrine, which is the sole underpinning of Mr. Augusto’s defense, is inapplicable.
Equally clear is that this is not the first time that Mr. Augusto has been sued for this type of conduct. He was previously sued by Capitol Records and Virgin Records for the same thing and consented to a permanent injunction.”