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Copyright: First Sale Doctrine

    The first sale doctrine highlights the difference between the right to distribute/own the "thing" versus the intellectual property right of the copyright itself. This is perhaps best understood by way of an example. Lets say that you bought the latest Harry Potter book from Amazon. Who owns the book? You do. Who owns the copyright? It may not be clear whether it is the author or the publisher, but one thing is certainly clear, it is not you. Can you sell the book once you are done reading it? Yes. Is this not a form of distribution? No. Why? Because you did not make a copy, you sold the copy that you owned. The copyright holder (or their licensee) is entitled to make its profit from the first sale. Could you make a copy of the book and sell it? No. Clearly that would be an infringing activity.

    The first sale doctrine is also known as the "exhaustion of rights" doctrine, and it applies with its own unique variations to both patent and trademark law. Internationally the concept is principally known by this latter term. The first sale doctrine is codified in section 109 of the copyright statute located here. Things get a little more abstract when we consider digital artifacts that are copyrighted. Assume that you bought five songs from iTunes. Also, further assume that digital rights management is no longer attached to the content, so that you are "free" to make copies (i.e. there are no technological impediments to making copies). Can you sell the songs that you bought? Yes and no. You can sell them if you were to delete any copies that you own, at least conceptually the same rules apply as with the Harry Potter example. However, non-protected digital artifacts can be copied in their entirety with little or no effort, and this is where the analogy to the Harry Potter book fails.

    Copyright owners of digital content are rightfully concerned with the ability of end users to sell perfect copies of their work. They attempt to limit their ability to do so via the law of private agreements otherwise known as contract doctrine. In general, courts have heretofore been willing to go along with these agreements, but this is an area of the law that is evolving (although for all intents and purposes the entire software industry believes that it is "settled" and the marketplace may indeed have the last word), and is the focus of significant amounts of research and commentary.


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