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Copyright Class 10 Infringement Part III

In the previous two classes (Infringement Part I and II), we’ve been looking at the heart of the typical infringement analysis. Today, we’ll be looking at one special limitation to infringement of the reproduction right and at infringement of the other rights besides the exclusive right of reproduction.

Infringement of the reproduction right of copyright in sound recordings

In order to fully understand, the limitation of the reproduction right in the copyright of sound recordings, we need to understand how copyright applies to music. It’s easiest just to think  of music as having two separate copyrights. There is one copyright in the musical composition, typically subsisting in the writer of the work, and another copyright in each particular sound recording, typically subsisting in the producer. The musical composition is what we think of as the musical work, the song itself.  The sound recording is a particular recording.

So any particular song you hear on the radio is subject to two copyrights.

Copyrights in sound recordings are very limited. They are only infringed by ‘mechanical’ reproduction. Basically, you have to use a machine to copy it. Put another way, if you hired a group of musicians to imitate, exactly, a sound recording, it would not be an infringement of the copyright in the sound recording (although it would obviously infringe the copyright in the musical composition).

The most interesting recent issue relating to sound recordings is whether digital sampling infringes the original work. See Bridgeport Music v. Dimension Films.

Other rights provided by copyright

Thus far in our examination of infringement, we’ve been talking about the exclusive right to reproduce the copyrighted work, in other words, the right to prevent others from copying the work. That is the most commonly asserted right, and the right most people associate with copyright. Hey, it’s right in the name.

But it is not the only right an owner of copyright gets – Section 106 of the Copyright Act provides six different rights:

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

Let’s look at each briefly.

Exclusive right to prepare derivative works

Section 101 defines “derivative work.”

A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship, is a “derivative work”.

The most important examples for fiction writers would be the conversion of a book into a movie, the translation of a book, the preparation of an audiobook version of the book, and in some cases the writing of a sequel (…and the preparation of an abridgment if we harken back to the golden days of Reader’s Digest).

Where you are most likely to see something that looks like this right is in the grant of rights clause in a book contract. However, that grant of rights actually includes both this right to prepare derivative works and the broader right to make reproductions of the work. Those provisions in the granting clause transfer the exclusive right, for example, to make a movie version of the book. In order to do so, that clause has to mean both the reproduction right and the derivative right.

The reason for this is the same reason why you rarely see the derivative right asserted by itself. The derivative right is most often asserted as an additional claim added on to a claim of infringement of the reproduction right. Thinking about the scope of the reproduction right is the key to understanding why. If you think back to our examination of the infringement analysis, it becomes immediately obvious that one can infringe the reproduction right without making an exact verbatim copy. A non-literal copy is still a violation of the reproduction right. One extension of that is that changing the medium of the work can still be a copy. Thus a photograph can be a copy of a sculpture and a movie can be a copy of a book. That means that most derivative works are also copies.

Factual circumstances that create potential infringements of the derivative right without infringing the reproduction rights are rare. One example is when an individual alters an authorized copy enough to create a derivative work. So if you bought a coffee table book, cut out the images, and then mounted them on tiles – you might have altered them enough to meet the statutory definition of a derivative work. See Mirage Editions v. Albuquerque A.R.T. Co. and Lee v. A.R.T. Co. A second example is when hardware or software is used to alter an existing program as it runs. See Lewis Galoob Toys v. Nintendo of America (anybody remember the Game Genie?) and Micro Star v. Formgen (involving Duke Nukem 3D levels)

Exclusive right to distribute the work

This right exists to close a “loophole” in the reproduction right. If one individual makes thousands of copies of DVD and then sells them to a second individual who then offers them for sale to the public, the second individual technically has not made any copies. The distribution right allows the copyright holder to go after the second individual directly. That individual may be the only one the owner can easily find.

The real story of this right is really its most important limitation.

Think about the scope of this right – distribution “by sale or other transfer of ownership, or by rental, lease, or lending”.

Have you ever given a book to someone as a gift?Have you ever leant someone a book? The first is a transfer of ownership and the second is a lending – in other words if we look no further than section 106, each of those activities appears to be an infringement of copyright!

But of course, it’s not. This is where the First Sale Doctrine, codified in Section 109, does its work:

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.

This exhaustion of the distribution right only occurs once the copyright holder has first parted with ownership of that particular copy. If ownership is not transferred by the owner, if instead the particular copy is only licensed to the recipient, the First Sale doctrine does not kick in. In the literary world, most publishers and retailers purport to license eBooks to readers rather than sell them. If that is the case, then the purchaser (?) cannot resale or even gift it. We’ve looked at this issue a few other places.

Exclusive right to display the work publicly

Section 101 provides:

To “display” a work means to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process or, in the case of a motion picture or other audiovisual work, to show individual images nonsequentially.


To perform or display a work “publicly” means—

(1) to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or

(2) to transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

Like the distribution right, the public display right has a broad limitation. Section 109(c) provides that the owner of a particular copy can display that copy without infringing this right. So a museum that owns the a painting (the physical object) can display it without violating the display right. Where you sometimes see this right litigated is in works that are shown in the background of movies and TV shows.

Exclusive right to perform the work publicly

Section 101 defines “perform”:

To “perform” a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible.

Like the display right, this right is limited to certain types of works.

Exclusive right to perform the copyrighted work publicly by means of a digital audio transmission

This right is specifically limited copyright in sound recordings. Section 101 provides a robust definition: “A “digital transmission” is a transmission in whole or in part in a digital or other non-analog format.” This was initially enacted because of a fear of a ‘celestial jukebox’ streaming music to devices, but it also applies to many internet music streaming services.

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Used eBooks: Policy Pros and Cons

I wanted to give a brief policy overview, both for and against, the application of the first sale doctrine to eBooks. In other words, the arguments for and against allowing the sale of “used” eBooks.

I’ll go into the actual legal arguments (theory, doctrine, what have you) in a later post. I know you’re going to be waiting on that one with bated breath. If you want a preview, go and read the ReDigi district court opinion.

Most writers I’ve run across have VERY STRONG opinions on this subject, and all in one direction. (“I say we take off and nuke used eBooks from orbit. It’s the only way to be sure.”)

So naturally, keeping my audience ever in mind, I’ll start with the other side.

The policy arguments for permitting the resale of eBooks:

  1. Consumer protection thing 1. Some believe that converting sales of books from physical objects to technologically limited files negatively effects the consumer. It shifts power to the publisher and may ultimately reduce the value of what the consumer gets for the money. Some variation on same price/less value or lower price/much less value. The value in that formulation could relate to the monetary value in terms of resale possibilities or the longterm value of possessing something that will not disappear if you lose a password or device.
  2. Consumer protection thing 2. The lack of a secondary market (i.e. used market) will eventually lead to inflated prices. The availability of used books at a cheaper price than new books acts to decrease prices of new books. Eliminating the used market would therefore, it is argued, lead to increased prices.
  3. Copyright expansion. From a historical perspective, whether you consider the last two decades or the last two centuries, copyright has expanded GREATLY. This is true in terms of both the scope of rights given to the holders of copyrights and of the duration of the rights. The balance created by the first sale doctrine is seen as a small limitation on expansive copyright rights, whether you view that balance as stemming from personal property rights or from an exhaustion doctrine. (Okay, okay, I’ll save the theory for later. Hey, I’m a law professor – what do you expect?)

The policy arguments against permitting the resale of eBooks:

  1. Lack of degradation. Physical books break down. Their covers get bent, their spines are broken, . . . they get ratty or even fall apart. eBooks do not break down. A “used” eBook is identical in quality to a “new” eBook. With physical books, a purchaser of a new book would get something different than the purchaser of a used book, just as the purchaser of a new car gets something different than the purchaser of a used car.  Mmmm, new book smell. Under this thinking, “used” eBooks would be much stronger competition for new sales. With physical books, there are reasons to buy new; not so, it is argued, with eBooks.
  2. Frictionless markets. Finding the used book you want can take more time than finding a new version. Maybe your local used bookstore doesn’t have the one you want. In other words, it may be easier to buy a new copy than to find a used version. (Amazon’s used book system for physical books may make this less true than it once was.) For eBooks however, because geography is taken out of the equation (the only “geography” remaining would be finding the correct website), it would be just as easy to find a “used” eBook as it would be to find a “new” eBook. Like the degradation problem, this would increase the competition new would face from used.
  3. Lack of resale being built into the price. I’ve heard many authors say that what they are giving the reader for the price paid is not something that can be resold. In other words, the lack of ability to recoup a portion of the original purchase price through the resale of the “used” eBook is already built into a lower original price.
  4. PIRACY. PIRACY. PIRACY. This is the dominant player for many in the ‘con’ camp. People just don’t believe users would not simply make a copy of an eBook and then sell the eBook in the used market. Most people arguing the “pro” side assume, for the sake of argument, that copy protection would be good enough to prevent this if we were to end up with a used market for eBooks. ReDigi claimed to monitor users’ computers to insure duplication did not result in their transfer of “used” mp3’s. As long as the belief that copying could happen on a rampant scale, this concern will dominate policy debates.

I’m not here today to declare a winner between these arguments, but I will offer two thoughts, that I will call “sideways.” That is, they come at the dispute not from a “pro” or “con” view, but from the “side.” Both of these stem from thinking about re-evaluating, in light of new technology, the incentive/public benefit calculus at the heart of copyright.

  1. We might consider a departure from monolithic copyright. Doesn’t that sound like an impressive term – “monolithic copyright”? (Professor, remember?) What I mean by that is that maybe what works for one type of art might not work for another type of art. So, we might do something different for music than we would do for books. Books are quite often read once and then not read again. (At least for most books with most readers – we don’t need to go into how many times I’ve read the Harry Potter series.) Music is different; most people don’t listen to a song and then never listen to it again. Music is experienced over and over again in typical usage. Because of this difference, a secondary (“used”) market for MP3’s may make more sense than a secondary market for eBooks.
  2. We could create a middle ground. We could permit the resale of eBooks, but legally mandate some sort of payment to the copyright holder. This would be a compulsory license akin to the mechanical license available for musical composition copyrights.

That’s a quick and (hopefully not too) dirty overview of the policy debates surrounding “used” eBooks. If you think I’ve left out any arguments for or against, I’d love to hear about them in the comments.


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The First Sale Doctrine: History through Today

One of the current controversies that I want to explore in this blog is the resale of eBooks.

Calm down, everyone. Go to your happy place.


OK, I’m not going to discuss eBook resale directly in this post; instead, I want to lay some of the groundwork for that discussion by providing some basic information about copyright’s first sale doctrine.

If you purchase a BluRay of the Firefly TV series and then give it a friend,* are you a copyright infringer? Is the owner of Redbox a copyright infringer for renting a BluRay disc of The Avengers? What about the proprietor of a used bookstore, or a customer of the same?

Intuitively, you probably know the answer to all of those questions is no. The first sale doctrine is the reason the each of those commonplace activities is not an act of copyright infringement.

A publisher, a department store, and a castaway

Hallie Erminie Rives in a kimono. I don't know why she is in a kimono.

Hallie Erminie Rives in a kimono. I don’t know why she is in a kimono.

At the beginning of the 20th century, Hallie Erminie Rives was a best-selling author as well as being a daughter from one of the oldest families in America and the wife of a prominent diplomat. Her books included Satan Sanderson, The Kingdom of Slender Swords, and The Valiants of Virginia, as well as Smoking Flax, controversial even when published in 1897 for its positive portrayal of a lynching. One of her other novels, The Castaway, was at the center of Bobbs-Merrill Co. v. Strauss et al., doing business as R.H. Macy & Co., the 1908 Supreme Court case that first established the first sale doctrine in the United States.

The original cover. Since the book sells itself about being three men whose lives are ruined, I'm not sure why there is a woman on the cover. Unless it's her fault that ... OK, I'm not going there.

The original cover. Since the book sells itself as telling the story of three men whose lives are ruined, I’m not sure why there is a woman on the cover. Unless it’s her fault that … OK, I’m not going there.

As an aside, the copyright in The Castaway expired a long time ago, meaning it is now in the public domain. That means, among other things, that you can probably find a lot of presses you’ve never heard of offering it for sale on Amazon. Of course, you can also find it available for free here if you want to take a look.

Now, back to the history of the first sale doctrine. OK, maybe not just yet. In the past few days, we’ve all been reading about the Apple decision and the attempts of big publishers to control prices, more specifically about publishers trying to find some way to force Amazon higher than their $9.99 price point for eBooks. Well, I’m sure you didn’t think that was the first time publishers tried to control the prices of their books. The underlying facts in Bobbs-Merrill v. Strauss were strikingly similar at least with respect to each party’s goals. The publisher Bobbs-Merrill wanted to maintain a price point of $1 while the department store Macy’s wanted drive foot traffic to its store by offering popular books at below market prices. Sound familiar?

In an attempt to keep the retail price of its books at a high level, Bobbs-Merrill printed the following just below the copyright notice in The Castaway:

The price of this book at retail is one dollar net. No dealer is licensed to sell it at a lower price, and a sale at a lower price will be treated as an infringement of the copyright.

A Cad? Not sure whether that word choice is less than timeless or AWESOME

A Cad? Not sure whether that word choice is less than timeless or AWESOME

Macy’s purchased the book wholesale and resold them for 89 cents. Bobbs-Merrill in turn sued them for copyright infringement.  Bobbs-Merrill did not allege that Macy’s had copied the book, but rather they alleged that Macy’s had infringed their “right to vend” the copyrighted work.

Most people think of copying when they think of copyright, and certainly the right to exclude others from making unauthorized reproductions is the central right granted to copyright holders. However, there are other rights. The Copyright Act of 1790, the applicable law in 1908, also included the “right to vend” the copyrighted work. The Copyright Act of 1976, the currently applicable copyright law, words this right as the exclusive right to distribute copies of the work.

The Supreme Court rejected Bobbs-Merrill’s argument that Macy’s resale of the book for les than the price specified constituted infringement of the copyright. Instead, they said that the right to vend granted by the copyright statute did not include the right to control resale of copies of the work after those copies were initially sold by the publisher. Note that the Court was explicit about its holding being an interpretation of the Copyright statute and not involving any claim of a contractual obligation created by the language printed in the book or otherwise.

This didn't work.

This didn’t work.

The first sale doctrine today

A year later, the Supreme Court’s holding was codified into the Copyright Act of 1909. The Copyright Act of 1976 also included what became known as the first sale doctrine in section 109:

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. [106(3) provides for the right of distribution.]

The statute, through later amendments, places some very interesting limitations on the first sale doctrine, as do later cases, particularly those involving shrink-wrap licenses on software. However, I will leave those for later discussions.

The first sale doctrine is often referred to as a doctrine of exhaustion – as in, the copyright holder’s rights in that particular copy are exhausted by the first sale. Another way to think of the first sale doctrine is to think of it as a balancing between two sets of property rights. The copyright owner holds one set of property rights, the copyright rights. The owner of an individual copy of a work holds the other set of property rights, the personal property rights in the physical object itself.

Remember that copyright law and the statute explicitly distinguish between the copyrighted work of authorship (an intangible) and a particular embodiment of that work (a tangible book, disc, print, etc,). The statute, in an apparent attempt to make the wording as confusing as possible, calls these embodiments “copies.” Except in the case of music, which for historical reasons the statute refers to as phonorecords. Don’t get me started on music copyright, the parachute pants of the copyright world.

So the owner of a physical object has personal property rights in that object. Just as copyright gives you a bundle of rights, so too personal property gives you a bundle of rights. One of those rights is the right of alienation. Now, that doesn’t involve bald aliens who get drunk on sour milk. The right of alienation basically means that the owner of property has the right to transfer the property rights to someone else.

So the conflict, and the need for balancing, then comes from the copyright holder’s exclusive right of distribution and the copy owner’s personal property right to alienate the copy. Section 109 and the first sale doctrine resolve that conflict. The copyright holder does have the exclusive right to distribute any copies of the work, but once the copyright holder has parted ways with a particular copy, the right of distribution no longer applies to that particular copy. The distribution right is exhausted by the first sale. Note that even though we call it the first ‘sale’ doctrine, the relevant distribution is any transfer of ownership whether it is a sale or a gift.

That’s the first sale doctrine in a nutshell. Hopefully, that will provide a foundation for later discussions of whether the first sale doctrine applies to virtual objects, such as eBooks.

*One of the greatest things a friend can do, by the way.

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