The first sale doctrine, codified at 17 U.S.C. § 109, grants the owners of a copy of a copyrighted work the right to sell, rent, or lease that copy without permission from the copyright owner. This doctrine, first endorsed by the Supreme Court in Bobbs-Merrill Co. v. Straus, was established at a time when the owner of a good necessarily had to forego possession in order to sell or lease the item to another.[...] The changes in technology and industry over the past two decades threaten to upend this balance. In today's digital world, an owner of a copy of a copyrighted work need not relinquish his perfect copy in order to sell it. Music, films, software, and video games can be ripped to an owner or lessee's hard drive and accessed indefinitely in their perfect, as-delivered state even after the sale or return of the physical media upon which the copyrighted content was first accessed. The first sale doctrine does not shelter resale or rental of purely digital copies (where no physical media are involved), but continues to protect the resale and rental of physical copies of digital content even after an individual has archived the material. Innovative rental distribution methods, such as Redbox kiosks and Netflix rental-bymail, have depressed revenue for copyright holders by lowering the costs consumers must pay to access video content. There is little doubt that the public has enjoyed short-term benefits from these changes, but the loss of profits for copyright holders portends a future with less content creation. Technological advancements have occasionally required changes to the first sale doctrine. When audiocassette technology enabled the inexpensive duplication of phonorecords, and when home computers made possible the quick duplication of software, Congress took action to protect the music and software industries by limiting for-profit rentals of those works. It did not, however, extend such protection to the film industry despite the introduction of the VCR. As a result, today individuals can cheaply rent DVDs and Bluray Discs from the likes of Netflix and Redbox, illegally rip the information to their digital home library, and retain this illegal copy long after returning the physical disc. This Note argues that, while the first sale doctrine is not solely responsible for declining home video sales, advancements in technology and industry may require a new approach to the doctrine in order to protect the rights of filmmakers in the digital age. Part I of this Note presents an overview of the first sale doctrine's origins as well as recent judicial application of the doctrine. Part II suggests legislative solutions that would revise the first sale doctrine in light of recent technological changes. Part III analyzes untested legal strategies that could allow filmmakers to circumvent the first sale doctrine altogether. Part IV concludes that market-based solutions, including increased digital distribution of content under a licensing regime rather than a sale-based regime, are a more realistic path towards promoting the interests of filmmakers and the public than the other suggested approaches.
Sage V. Heuvel,
Fighting the First Sale Doctrine: Strategies for a Struggling Film Industry,
Mich. Telecomm. & Tech. L. Rev.
Available at: http://repository.law.umich.edu/mttlr/vol18/iss2/7