As digital networks emerge as the dominant means of distributing copyrighted works, the first sale doctrine is increasingly marginalized. To the extent the use and alienation of copies entails their reproduction and adaptation to new platforms, the limitations first sale places on the exclusive right of distribution decrease in their legal and market impact. This fact of the modern copyright marketplace has led to calls for statutory clarification of digital first sale rights. Acknowledging the obstacles to legislative intervention, this Article argues that courts are equipped to limit copyright exclusivity, enabling copy owners to make traditionally lawful uses of their copies, including resale through secondary markets. We argue that first sale is not simply an isolated limitation on the distribution right. Instead, it is a component of a broader principle of copyright exhaustion that emerges from early case law preceding the U.S. Supreme Court’s foundational decision in Bobbs-Merrill v. Straus. This context reveals a common law of copyright exhaustion that embraces a set of user privileges that include not only alienation but renewal, repair, adaptation, and preservation. Despite congressional recognition of exhaustion in sections 109 and 117 of the Copyright Act, this Article concludes that courts have ample room to apply and continue to develop common law rules that preserve the many benefits of the first sale doctrine in the digital marketplace.
Perzanowski, Aaron and Jason Schultz. "Digital Exhaustion." UCLA Law Review 58, no. 4 (2011): 889-946. (Work published when author not on Michigan Law faculty.)