separate cases regarding copyright law's "first sale doctrine" are
currently pending in the federal courts and their outcomes will likely have
ramifications, some of which may be unexpected, in the global marketplace for
the production and distribution of creative content, digital or otherwise.
"first sale doctrine" is grounded in, Section 109 of the Copyright Act
which allows the owner of a copy of a work "to sell or otherwise dispose
of" that copy without permission from the copyright owner.Thus, while
Section 106 of the Copyright Act grants copyright holders the exclusive right
to distribute copies of their works, after those copies are first sold, the
copyright holder loses control of subsequent sales.This is how the used book
market is able to operate–while the copyright holder of a work (e.g. the
author) has the exclusive right to distribute copies of the work in book form,
once a book is first sold, the purchaser (and any subsequent purchaser)
controls that copy of the book, not the copyright holder.
surprisingly, despite the fact that copyrighted works have been distributed in
digital form for over a decade, the question of a "digital first sale
doctrine" is still being debated and litigated.The latest case–which
brings the debate over a "digital first sale doctrine" into sharp
relief involves ReDigi, a tech startup that offers users a way to sell legally
purchased digital music and buy "pre-owned" music.
a user seeks to sell her digital music files on ReDigi, the service's software
verifies that the music file was legitimately purchased, erases it from the
user's hard drive, and then uploads it to ReDigi's servers where it is sold to
another user.Therefore, the service merely facilitated a secondary sale of the
music files, which was permitted under the "first sale doctrine".
Records sued claiming that the first sale doctrine does not apply to digital
goods because the only way to resell a digital file is to make a copy of the
file on the secondary buyer's computer or other device.As Capitol pointed out,
the "first sale doctrine" does not trump the copyright holder's
exclusive right to make copies of a work.In analogous terms, a purchaser of a
book cannot claim that the "first sale doctrine" permits him to
photocopy the book, throw out the original and resell the photocopy. This is
consistent with the approach the Copyright Office took when in 1998 it
recommended against creating a "digital first sale" provision as part
of the Digital Millennium Copyright Act.
maintains that no copy is created, and even if one was it would be the result
of the user's volitional conduct, not ReDigi's (relying on the Second Circuit's
oft-cited cloud computing decision in Cartoon Network, which we have analyzed in detail).
decision on the parties' cross-motions for summary judgment is
imminent.However, a ruling that rejects a "digital first sale doctrine"
would set up a conflict between US and EU law. As we discussed in July, the
European Court of Justice effectively created a "digital first sale"
right for used licenses of downloaded software, putting European consumers in a
much stronger position than American buyers.This US-European division may grow
wider or narrower depending on how future cases, like ReDigi's, turn out.
pending decision in another case interpreting the scope of the "first sale
doctrine" will also have global implications.In late October, the US
Supreme Court heard oral arguments in a case that will determine how the first
sale doctrine applies to US copyrighted goods that are manufactured abroad.In
Kirtsaeng v. John Wiley & Sons, the petitioner bought legitimate copies of
Wiley textbooks in Thailand where they are sold for considerably less money,
shipped them to the US, and then sold the books for a profit.