Will the First Sale Doctrine Disappear?

Article excerpt

The first sale doctrine is one of the most important copyright law principles for libraries. This doctrine, now codified at 17 U.S.C. section 109, allows a lawful owner of a copy of copyrighted material to lend, sell or give away that material. The exact language is "...the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord." This makes it possible for libraries to lend a copyrighted book it has purchased or received as a gift. In fact, it protects the right of the gift-giver to make that donation and allows the library to sell, rent to users or pass along the material to another library as part of a weeding process.

For years, libraries have relied on this principle that describes the rights of the owner of a publication. Cases from the late nineteenth and twentieth centuries established the first sale doctrine as a limitation on the copyright owner's distribution rights after the initial transfer of a copy. When the copyright law was updated with the 1976 Copyright Act, the first sale doctrine was endorsed by Congress with the inclusion of section 109 of the new code. While other countries around the world passed additional laws that required new payments to the copyright owner each time a library lent a book, the United States never passed such "public lending right" legislation and held fast to the full meaning of the first sale doctrine.

When software entered the picture and was recognized as a proper subject for copyright, copyright owners focused new energies on avoiding the first sale doctrine's limitations on their control over each copy sold. In 1990 Congress passed the Software Rental Amendments Act in response to software publishers' concerns that sales of their products were diminished by the development of a secondary market that would rent the software to other users. This amendment narrowed first sale rights significantly by forbidding the renting or lending of computer programs, providing an exception only for nonprofit libraries serving a nonprofit need. [1]

Most special libraries probably do not meet the definition for the amendment's exception because of the nonprofit restriction. It may be a small loss, though, because software publishers are seeking to side step the first sale doctrine entirely. Since the doctrine requires the existence of an "owner of a particular copy or phonorecord lawfully made," the publishers avoid the law by avoiding owners. The publishers now say that they do not sell copies; they sell certain uses of the copy. These transactions are achieved by the inclusion of contracts or licenses that outline the terms of the purchase, take it or leave it. Thus the first sale doctrine cannot apply. As a greater percentage of libraries' collections are electronic, the idea of the owner is lost. Libraries may not miss the first sale doctrine if they can negotiate equivalent rights at a reasonable price. The difference, however, is that the federal copyright law protected libraries and other users of copyrighted information from an unequal balance of power in the print world. In the electronic world, each library may be on its own.

U.C.I.T.A., the Uniform Computer Information Transactions Act, a model law proposed by the National Conference of Commissioners on Uniform Laws, would further validate these take-it-or-leave licenses. If other states join Maryland and Virginia in enacting this law, or if publishers designate Maryland or Virginia as the choice-of-law state in their license, the first sale doctrine further loses its relevance. …