Magazine article Information Today

First Sale Doctrine Put to the Test

Magazine article Information Today

First Sale Doctrine Put to the Test

Article excerpt

The first sale doctrine, which was first recognized by the U.S. Supreme Court in 1908 and later codified in the Copyright Act of 1976, allows libraries to exist. As Title 17, Section 109 of the U.S. Code, the doctrine permits the owner of a copy of a work to sell, lend, give away, or destroy his or her particular copy without the permission of the work's copyright owner. Without this exception, the copyright owner's right to control distribution of a copyrighted work would serve to prevent libraries from lending their books, or me from selling my old CDs on eBay.

While the first sale doctrine has been a part of copyright law for nearly 100 years, it is still somewhat controversial. Every time a library lends a book (or DVD, CD, or audiobook) to a patron, it becomes likely that the patron will not purchase the item. As a result, the copyright owner does not receive any additional income for his or her creative efforts.

The Right to 'Vend'

In establishing the first sale doctrine, the Supreme Court noted that copyright law protects the copyright owner's right to "vend," or copy and distribute, the work as desired. The broader goals of copyright law are to balance the rights of copyright owners with the public's interest in disseminating knowledge. Once a copy is "vended" by the copyright owner, the purchaser of the particular work is allowed to sell his copy, lend it, or otherwise pass it on in keeping with those broader goals.

Digital content has created challenges for the first sale doctrine. Two important limitations in the doctrine have restricted its applicability to most forms of digital content. The first is the requirement of "lawful ownership." Most software, databases, and other digital content is licensed, which limits the level of "ownership" that the user obtains. And second, the doctrine applies to a particular "copy" of a work. Digital distribution doesn't transfer the particular copy of a work, but it makes a new, identical copy that is distributed. This prevents the first sale doctrine from applying, and it invokes the copyright owner's right to control copying.

Promotional CDs

An interesting lawsuit, initially filed by Universal Music Group (UMG) against Troy Augustino (an eBay-based seller of promotional CDs), raised intriguing questions about ownership and the kinds of licensing agreements that have restricted the first sale doctrine.

The music industry has long offered free, promotional copies of records, tapes, and compact disks to radio stations, music critics, distributors, and similar individuals. The record company usually distributes the music to generate interest. Typically, the recordings are stamped with a "Promotional" label. The UMG label warns against unauthorized copying and indicates that the CD is licensed for personal use only, prohibits "resale or transfer of possession," and "reserve(s) all rights under U.S. copyright law."

However, it is not uncommon for the recipients to give away these promotional materials, or for the original recipient or a third party, such as Augustino, to sell the recordings. Augustino responded to UMG's lawsuit by indicating that he is now the lawful owner of the promotional CDs and his sale of them is protected by the first sale doctrine.

Lawful Ownership

The lawsuit raises important questions about what constitutes lawful ownership. …

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