John Villasenor, May 28, 2013
In 1908, the Supreme Court articulated the first sale doctrine, holding inBobbs-Merrill Co. v. Straus that a copyright owner’s “right to vend” did not include the right “to control all future retail sales.” The doctrine was codified in the Copyright Act of 1909 and again in §109(a) of the Copyright Act of 1976, which states:
“Notwithstanding the provisions of section 106(3) 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.”
§109(a) has generally been interpreted to apply to digital works only to the extent the material object containing a lawfully made copy is physically transferred pursuant to a sale or other disposition. For example, the owners of lawfully made movie DVDs and music CDs are free to sell them on eBay or donate them to a library. In addition, there is nothing in the language of §109(a) that would prohibit the sale of a storage device such as an iPod containing songs that were lawfully purchased (as opposed to licensed) and downloaded.
However, attempts to read §109(a) as permitting fully digital resales, in which copies of works are conveyed from sellers to buyers through electronic file transfers without the authorization of the copyright holder(s), have run into multiple challenges. First, courts have repeatedly held that §109(a) provides a defense to infringement of the distribution right in §106(3) only with respect to a particular copy of a work, and not for the new copy created during an electronic file transfer. More fundamentally, §109(a) is directed to an exception to the copyright holder’s exclusive distribution right in §106(3) and not to the reproduction right in §106(1). Courts have ruled that the new digital copy of a work created on a transferee’s computer in a file transfer implicates the copyright holder’s reproduction right.
In short, U.S. copyright law does not currently have a digital first sale doctrine. But what would happen if §109 were expanded to cover digital file transfers? And, if such a modification were made, how would the Supreme Court’s March 2013 holding in Kirtsaeng v. John Wiley & Sons that “lawfully made under this title” in §109(a) is not geographically limited impact global digital trade in copyrighted works?
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