First Sale Doctrine and Digital Content

Second hand stores, such as used CD stores and eBay, have been around for years and are able to operate under an exception to the Copyright Act named the First Sale Doctrine. Simply stated, this doctrine allows the legal purchaser of a copyrighted work to sell or transfer the copyrighted work to a subsequent buyer without violating a copyright holder’s distribution rights. So let’s think about our used CD shops and eBay (and let’s ignore eBay as a conduit between buyers and sellers, because we’re talking about the sellers here, and also the analysis would still apply as to eBay as their business model encourages the sale of used goods and thus would fall under the copyright laws). These businesses sell used tangible goods such as physical copies of CDs, posters or photographs that are clearly copyright works, were clearly originally sold somewhere else, and are now being resold. This is a textbook first sale doctrine business model and why these shops are allowed to exist under copyright laws.

But now we have computers, and a great amount of entertainment content is in digital not physical form. Think about every song you download off iTunes or every movie you download off Amazon. Does the first sale doctrine apply to digital content? Can you sell that what you have purchased? Recently, the Recording Industry Association of America (RIAA) has instituted a legal response against start up “used digital content” stores that are reselling digital music, under the belief that the first sale doctrine does not apply to digital content.  The RIAA’s argument is that digital content is not purely transferred in contrast to an exchange of physical copies, and the ‘seller’ does not necessarily have to destroy the digital content once transferred. Doubly problematic is uploading digital content to a digital content store is in essence creating a new copy (as the original still remains on the uploaders computer), which is a technical copyright infringement on its own.

It will be awhile before an outcome is determined in this case, but is a great example of the complexity of intellectual property protection in the digital landscape.

Bradley Legal Group, P.A. are Intellectual Property lawyers, Entertainment lawyers and Music lawyers servicing clients in Miami, Fort Lauderdale, Boca Raton, West Palm Beach, Orlando, and Nashville. We also affiliate with entertainment lawyers licensed in New York and Washington, D.C. © 2012 Bradley Legal Group, P.A.