What is First Sale Doctrine in Copyright all about?

Copyright law grants creators exclusive rights to their original works, like books, music, software, and artwork. These rights allow them to control copying, distribution, and public display. But what happens once you, as a consumer, purchase a lawfully obtained copy of a copyrighted work? Does the copyright owner still control what you can do with it?  And if so, in what ways?  

This is where the first sale doctrine comes in. It's a crucial concept that impacts how you can use and dispose of copyrighted materials you've purchased. Let's delve into the basics of the first sale doctrine and how it might affect you, since these issues arise from time to time with clients. 

What is the First Sale Doctrine?

The first sale doctrine is a legal principle that limits the copyright owner's control over a particular copy of their work after it's been lawfully sold.  This doctrine, in essence, acts to cut off the copyright owner's rights in the created work after the product is first sold (ie. when the copyright owner releases their work into the marketplace).  Another way to describe it is that the copyright holder's right to control the distribution of their work goes away after the “first sale” of the work,(hence the name). In more straightforward and more practical terms, once you buy a book, CD, DVD, artwork or any other authorized copy of a copyrighted work, the copyright owner generally loses the right to control what you do with that specific copy. You can resell it, lend it, give it away, or even destroy it, without their permission.  The key here is that this is all in relation to the original copy or version that the copyright owner caused to be sold.  You still cannot reproduce that original to resell or lend copies.  First sale doctrine never protects someone who makes unauthorized reproductions of a copyrighted work, even if they lawfully purchased the original copy.

This doctrine is codified in Section 109 of the U.S. Copyright Act [17 U.S.C. § 109] and promotes several key objectives:

• Free Market: It allows for the free flow of copyrighted works in the resale market.
• Consumer Rights: It empowers consumers to enjoy the full value of their purchases.
• Balance: It strikes a balance between protecting creators' rights and allowing for the secondary market of copyrighted goods.

The doctrine is of necessity for such everyday things as the function of libraries, book resellers, used video game stores, art galleries, etc.  

What can you do with a Copy under the First Sale Doctrine?

Here are some ways you can exercise your rights under the first sale doctrine:

• Resell: You can sell your lawfully obtained copy, whether it's a used book, a video game, or a piece of software. This allows for the existence of used bookstores, thrift shops, and online marketplaces for copyrighted works.
• Lend or Rent: You can lend or rent your copy to others, which is how libraries and rental services operate.
• Public Display: In some cases, you may be able to publicly display your copy. For instance, an art collector could exhibit a lawfully purchased painting.

Some Key Exceptions to First Sale Doctrine

As with many legal doctrines, there are exceptions that you need to keep in kind and understand. Most of these exceptions revolve around the "lawful sale" or "release" of the copyrighted work by the copyright owner into the marketplace.  Here are some of those key exceptions and how they operate.

• Counterfeit or unauthorized copies: In cases where someone has made an illegal copy of a copyrighted work, which you have purchased, the copyright owner neither released the work for sale, nor can your purchase be considered a "lawful sale."  As such, First Sale Doctrine does not apply to such copies.
• Promotional Copies: Again, if the copy that you receive was never sold, but rather was used for promotional purposes, it was never intended for commercial distribution and therefore (depending on the circumstances) First Sale Doctrine may not apply.
• Salvaged Rejects or Misprints:  If the copyright owner never "released" the copy into the marketplace and rather discarded or sold it as salvage/refuse, the First Sale Doctrine may not apply.  So if a printing company sells its misprints or rejects them to a recycling company to destroy and recycle them, these copies cannot be put back in the marketplace.  First Sale Doctrine does not apply, and the copyright owner still controls what can be done with them.
• It doesn't apply to rentals or licenses: If you rent or license software, the terms of that agreement may restrict your ability to resell or redistribute it.
• It doesn't apply to the right of public performance: Even if you own a copy of a song, playing it publicly for profit might require permission from the copyright owner.
• Limited License Agreements: If the terms of sale include a limited license rather than an outright sale, the First Sale Doctrine may not apply. In such cases, the buyer may have specific restrictions on how they can use or transfer the copy.  This is an important exception because, very often, digital works or software may involve a limited license rather than an outright sale.  If you download a song or an e-book, you may not have the right to distribute or resell the same.  

The First Sale Doctrine in the Digital Age

The application of the first sale doctrine in the digital age can be more complex. For instance, legally downloading a book and then reselling the digital file might not be permitted. Similarly, reselling access to a subscription service you purchased may violate the service's terms of use.  That is due to the fact the doctrine does not apply when possession of the copy occurs through “rental, lease, loan, or otherwise, without acquiring ownership of it,” unless the copyright owner authorizes it. This stark fact of reality was highlighted back in 2009 when Amazon's Kindle service took action to delete copies of George Orwell's copyrighted book "Animal Farm" from the devices of subscribers who had downloaded it.  This was after Amazon discovered that it did not have sufficient rights to permit it to distribute the electronic version to its subscribers. Yes, even the big companies can run afoul of copyright law and get in trouble.

In another example, software developer Adobe prevailed in a copyright action over a re-seller who had acquired Education versions of Adobe products 9at a discounted price), and then attempted to resell them to the general public.  The Court in that instance, ruled that the license (EULA) prevented such resale.

And of course, people may remember the Napster case, where the songs that were downloaded via the original Napster (back when it was set-up to permit the distribution of exclusively pirated songs) could not be considered lawful nor distributable.

When Might You Need a Lawyer Regarding the First Sale Doctrine?

If you're unsure whether your intended use of a copyrighted work falls under the first sale doctrine, it's advisable to consult with an attorney specializing in copyright law. Here are some situations where legal advice might be helpful:

• Online Marketplaces: If you sell copyrighted materials online, understanding the first sale doctrine can help you avoid being accused of copyright infringement.
• Reselling Software: The terms of software licenses can be intricate, and an attorney can help you navigate the first sale doctrine in that context.
• Public Display: If you intend to display a copyrighted work publicly, you may need to ensure your use falls under the fair use doctrine or obtain permission from the copyright owner.

Conclusion: Be Aware of the Doctrine, and its Exceptions!

The first sale doctrine is a cornerstone of copyright law that empowers consumers and fosters a healthy resale market for copyrighted works. However, it's not a blanket permission to do whatever you want with a copyrighted work. By understanding the doctrine's scope and limitations, you can avoid copyright infringement and enjoy the full benefits of your lawful purchases. It is thus always an excellent idea to consult with a lawyer about the First Sale Doctrine, its application and its exceptions.  

Our office stands ready to assist you in case you need a consultation about copyright law.

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