The First Sale Doctrine

Copyright law provides copyright owners several exclusive rights, including the right to distribute copies of their works. See, 17 U.S.C. §106 (2006) (granting copyright owners the exclusive rights to reproduce their works, prepare derivative works, distribute copies, to perform their works publicly, and to display the copyrighted works publicly). However, a copyright owner’s exclusive right to distribution is limited by a provision that authorizes the owner of a particular copy of a work to sell or otherwise dispose of that copy without having to seek the permission of the copyright owner. 17 U.S.C. § 109(a).  In other words, a copyright holder who sells or gives away a copy of his or her work no longer retains an exclusive right over that particular copy.  The new owner of that copy can then sell it, donate it, rent it or otherwise dispose of it, with certain exceptions for leasing/renting related to software and phonorecords. See, 17 U.S.C. § 109(b).

The statutory provision at hand, Section 109 of the Copyright Act, is a codification of the “first sale doctrine” and an extension of the principle stated in 17 U.S.C.A. § 202 that ownership of the material object is distinct from ownership of the copyright in the material. Columbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir. 1984). The “first sale doctrine,” which was developed under prior law, provided that the copyright owner’s exclusive right to distribute copies of the copyrighted work extended only to the first sale of that copy. Platt & Munk Co. v. Republic Graphics, Inc., 315 F.2d 847 (2d Cir. 1963); Independent News Co. v. Williams, 293 F.2d 510 (3d Cir. 1961); U.S. v. Powell, 701 F.2d 70 (8th Cir. 1983); U.S. v. Wise, 550 F.2d 1180 (9th Cir. 1977); C. M. Paula Co. v. Logan, 355 F. Supp. 189 (N.D. Tex. 1973). After the first sale of a copy, the copyright owner had no further control over future sales of that copy.

Although Section 109 of the Copyright Act has many clear benefits to the public, including the discounted secondary sales market for products (such as Ebay, Craigslist, yard sales and used book stores), the large shift towards digital consumption of works (via websites such as Itunes and Amazon’s digital store, and for products such as ipods, ipads, kindles and nooks) constrains the benefits of the first sale doctrine.  Since the Copyright Act does not allow consumers to purchase digital products, copy them, and resell them on the secondary market, the applicability of Section 109 to digital purchases would seem extremely limited, if not eliminated.  Accordingly, as consumers move from physical copies to digital works, many of the benefits of first sale doctrine will be lost