First Sale Doctrine (Intellectual Property Law Series)

It is generally considered legal, therefore, to re-sell a copyrighted work. In the United States, this is known as the first- sale doctrine. This doctrine allows a purchaser to sell a copyrighted work or a specific copy of the work without permission once the work has been lawfully obtained.

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It is important to note that the first-sale doctrine permits the transfer only of the legitimate copy. It does not permit making or distributing additional copies. The first-sale doctrine is known as exhaustion of rights in other countries and is a principle which also applies, though somewhat differently, to patent and trade mark rights. Omega manufactured these watches outside the US and did not authorize their importation into the US.

Based on the Quality King case, the 9th Circuit held that "application of first-sale doctrine to foreign-made copies would impermissibly apply" the Copyright Act extraterritorially. However, the court stated that first-sale doctrine might still apply to a foreign manufactured copy if it was imported "with the authority of the U. Costco , and affirmed However, as an evenly split decision, it set precedent only in the 9th Circuit, not nationwide. However, in Kirtsaeng v.

The case involved a plaintiff who imported Asian editions of textbooks that had been manufactured abroad with the publisher-plaintiff's permission.

The defendant, without permission from the publisher, imported the textbooks and resold on eBay. The Supreme Court's holding severely limits the ability of copyright holders to charge vastly different prices in different markets due to ease of arbitrage. The decision removes the incentive to US manufacturers of shifting manufacturing abroad purely in an attempt to circumvent the first-sale doctrine. This exception was designed to prevent music stores from renting records and thereby facilitating home copying. Section b is an exception to the first sale doctrine, but it is limited in several ways.

It applies only to rentals, and not to resale or other transfers.

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It is also limited to a subset of sound recordings—only those sound recordings that contain only a musical work. It does not apply to sound recordings that contain other content, such as commentaries or dialog soundtrack, or to non-musical sound recordings, for example audiobooks. Lastly, libraries and educational institutions are exempt from this restriction, and may rent or loan musical sound recordings.

The exception does not apply to lending of a copy by a nonprofit library for nonprofit purposes, provided the library affixes an appropriate warning. The amendment also specifically excluded:. With reference to trade in tangible merchandise, such as the retailing of goods bearing a trademark, the first sale doctrine serves to immunize a reseller from infringement liability. Such protection to the reseller extends to the point where said goods have not been altered so as to be materially different from those originating from the trademark owner.

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From Wikipedia, the free encyclopedia. This article is about the first-sale doctrine as applied to copyright. For the analogous doctrine applicable to patents, see Exhaustion doctrine. This article has multiple issues.



Please help improve it or discuss these issues on the talk page. Learn how and when to remove these template messages. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. August Learn how and when to remove this template message.

This article possibly contains original research. Please improve it by verifying the claims made and adding inline citations. Statements consisting only of original research should be removed. Vanderbilt Law Review, 66 2 , Retrieved 8 May A European court has ruled that it's permissible to resell software licenses even if the package has been downloaded directly from the Internet. It sided with a German firm in its legal battle with US giant Oracle.

Could this be the victory we need for a "gamer's bill of rights"? DRM is an oft-cited acronym, and resonates negatively in the gaming community. The Court of Justice of the European Union ruled in favor of reselling downloaded games. Simply put, legally purchased and downloaded games will be treated like physical copies of the game, and consumers can then sell their 'used' game. InfoCuria - Case-law of the Court of Justice. Retrieved November 28, Much depends on the agreement between the original seller and original buyer.

In some instances the agreement characterizes the initial transfer between these parties as a sale, which therefore might allow resale under the doctrine. In other instances the agreement characterizes the initial transfer as a license, which means that the transfer is more like a lease so the doctrine wouldn't apply and resales wouldn't be permitted.

There's significant ongoing litigation regarding these issues, and it might be some time before there's a clear resolution. The purpose of a trademark is to identify the source of an item. Specific names, images, colors, and the like can be associated with items as trademarks so consumers, upon seeing the trademark, quickly recognize the item's manufacturer—seeing a "swoosh" on athletic apparel, for example, would quickly make you conclude that Nike made that apparel.

Trademark infringement usually occurs when someone uses a name, image, or color that's similar to another's trademark on items that are similar to what the other sells. This creates a likelihood of confusion among consumers because it becomes difficult to identify the manufacturer of the similarly marked items. Application of the first-sale doctrine to trademarked items is governed by the need to prevent this confusion. Reselling a trademarked item is usually permissible as long as it hasn't been materially changed from the time of the original sale.

Also, if the item has been repackaged for resale, the notice of repackaging must be adequate. The rationale for these limitations is clear—the reseller isn't allowed to mislead or deceive consumers about the source or make of the item, and the trademark owner can be assured that its brand won't be damaged by resales of inferior products.

DOMESTIC VERSUS FOREIGN SALES

In that case, a student purchased textbooks in Thailand at prices that were much lower than the prices of those books in the US. The student had the textbooks shipped to the US and resold them at a profit while undercutting the US price. The publisher Wiley sued the student for copyright infringement, and the student claimed that the first-sale doctrine permitted his activities.

Two lower federal courts, the District Court for the Southern District of New York and the Court of Appeals for the Second Circuit, ruled that the doctrine didn't apply when the resold goods were manufactured outside of the US, meaning that the student was liable for infringement. However, the Supreme Court reversed those decisions and ruled that the doctrine does indeed apply to foreign-made goods. In fact, the Supreme Court ruled that the doctrine applies to all lawful copies made anywhere, not just in the US. The student, therefore, was permitted to import the textbooks and resell them, and the publisher couldn't prevent it under copyright law.

This decision will likely benefit consumers who want to purchase copyrighted items that are available outside of the US at reduced prices. However, it creates a dilemma for copyright owners who rely on pricing that's different for different regions of the world. Multiple pricing models based on local economic factors might need to be replaced by uniform pricing. A shift to electronic distribution—using e-books, for example—might make this easier. But an open question, particularly in view of the current debate over the resale of digital copies of songs, is whether the doctrine would apply to electronic copies of the books.

The Kirtsaeng case raised questions about its further application to international patent exhaustion—that is, whether items lawfully made and sold outside of the US exhaust a US patent owner's rights to exclude.

Copyright law: the first sale doctrine and exhaustion of rights (3) - TransLegal

Currently, there's no international patent exhaustion based on a decision from the Court of Appeals for the Federal Circuit. In , that court reiterated its position in Nine-star Tech. ITC , which dealt with importing foreign remanufactured inkjet cartridges to the US that infringed certain patents owned by Epson and Seiko Epson. Ninestar appealed the finding of infringement against it to the Supreme Court.

Notwithstanding its ruling in the Kirtsaeng case, which permitted the resale of imported copyrighted items, the Supreme Court declined to hear the appeal. This means, at least for now, that buying a product outside the US that's covered by a US patent and importing it into the US without authorization from the patent owner is still infringement.