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Consumers' Rights Over Copies They Buy: The First Sale Doctrine

While copyright holders have the exclusive rights to authorize reproduction, "derivative works", and public performances and displays, the public also has certain rights to use copyrighted works. The "First Sale" doctrine allows members of the public the right to resell or lend copies of works they have purchased. (17 U.S.C. § 109.) Similar rights around the world or in other areas of law are often called the "exhaustion doctrine" — meaning that the first sale of a work has exhausted the rightsholder's rights to control distribution of that copy.

A copyright protects only the content inside a book, or the song in a sound recording. The package that contains the content — the actual book, CD, or printed poster, for example — is not copyrighted, and the person who buys the item can do whatever they want to that copy. (There is an exception in the law for unique works of visual art.)

There are some important exceptions to the First Sale Doctrine, however.

First, the First Sale Doctrine permits only the re-distribution of the copy that was purchased. The doctrine doesn't allow a purchaser to make many new copies and sell those.

Second, the First Sale Doctrine only limits the copyright holder's distribution right, not her rights of reproduction, public performance, public display, or creating derivative works. Simply purchasing a book does not give the purchaser the right to make thousands of copies of the book. Purchasing a DVD does not give the purchaser the right to show it publicly.

This can get tricky when considering derivative works. The law gives the copyright holder an exclusive right to make works based on ("derived from") the original — translations, musical arrangements, dramatizations, fictionalizations, adaptations from a novel to a movie, abridgements, or "any other form in which a work may be recast, transformed, or adapted".

Because the derivative works right is so broad, some courts have held that manipulating the copy into a new form or new work is not protected by the First Sale Doctrine. For instance, one court held that cutting pages out of a collection of prints, mounting them on tiles, and reselling them violatd the copyright owner's right to make derivative works. (Mirage Editions v. Albuquerque A.R.T..) But a different court held that putting loose prints on tiles did not violate the derivative works right, and was protected by First Sale. (Lee v. Deck the Walls.)

Third, music, software, and computer games have special rules:

• Music: According to section 109(b) of the Copyright Act, it is illegal to buy copies of recorded music and rent them.
• Software: Section 109(b) also makes it illegal to buy copies of software and rent them.
• Video games: Section 109(b) does permit buying and then renting copies of games for use on video game players such as the Sony PlayStation or XBox platforms.

Last, digital content, such as software or MP3s purchased from stores like iTunes are often sold as a "license", and the license terms may attempt to restrict rights to resell. These terms may or may not be legally valid, but courts have not yet determined whether such licensing terms would be enforced. However, attempting to resell a legitimately purchased downloaded song may draw the ire of the online vendor or the recording industry, which is likely to demand the sale be cancelled.