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First Sale Under Siege: If You Bought It, You Should Own It

By Corynne McSherry | EFF | December 23, 2012

The “first sale” doctrine expresses one of the most important limitations on the reach of copyright law. The idea, set out in Section 109 of the Copyright Act, is simple: once you’ve acquired a lawfully-made CD or book or DVD, you can lend, sell, or give it away without having to get permission from the copyright owner. In simpler terms, “you bought it, you own it” (and because first sale also applies to gifts, “they gave it to you, you own it” is also true).

Seems obvious, right? After all, without the “first sale” doctrine, libraries would be illegal, as would used bookstores, used record stores, etc.

But the copyright industries have never liked first sale, since it creates competition for their titles (you could borrow the book from a friend, pick it up at a library, or buy it from a used book seller on Amazon). It also reduces their ability to impose restrictions on how you use the work after it is sold.

Two legal cases now pending could determine the future of the doctrine.  The first is Kirtsaeng v. Wiley & Sons. In that case, a textbook publisher is trying to undercut first sale by claiming the law only covers goods made in the United States. That would mean anything that is made in a foreign country and contains copies of copyrighted material – from the textbooks at issue in the Kirtsaeng case to shampoo bottles with copyrighted labels – could be blocked from resale, lending, or gifting without the permission of the copyright owner. That would create a nightmare for consumers and businesses, upending used goods markets and undermining what it really means to “buy” and “own” physical goods. The ruling also creates a perverse incentive for U.S. businesses to move their manufacturing operations abroad. It is difficult for us to imagine this is the outcome Congress intended.

The second is Capitol v. Redigi. Redigi is a service that allows music fans to store and resell music they buy from iTunes. Here’s how it works: customers download Redigi software and designate files they want to resell. Redigi’s software checks to make sure the files came from iTunes (so it knows they were lawfully purchased), pulls the data files from the reseller’s computer to cloud storage, and deletes them from the reseller’s hard drive.  Once the music is in the cloud, other Redigi users can buy it. When a purchase is made, Redigi transfers ownership of the file and the seller can no longer access it. At last, a way for users to exercise their traditional right to resell music they no longer want.

No way, says Capitol Records.  According to Capitol, the first sale doctrine simply doesn’t apply to digital goods, because there is no way to “transfer” them without making copies.  When users upload their music to the cloud, they are making a copy of that music, whether or not they subsequently (or simultaneously) delete it from their own computers, and the first sale doctrine doesn’t protect copying.

A win for Capitol would be profoundly dangerous for consumers.  Many of us “buy” music, movies, books, games etc. in purely digital form, and this is likely to be increasingly true going forward. But if Capitol has its way, the laws we count on to protect our right to dispose of that content will be as obsolete as the VHS tape.

The Redigi case also highlights another growing problem.  Not only does big content deny that first sale doctrine applies to digital goods, but they are also trying to undermine the first sale rights we do have by forcing users to license items they would rather buy. The copyright industry wants you to “license” all your music, your movies, your games — and lose your rights to sell them or modify them as you see fit. These “end user license agreements” reinforce the short-sighted policies that prevent us from lending ebooks to friends, re-selling software packages, or using text-to-speech to read ebooks aloud.

We have been worried about the future of first sale for a long time, but it seems we are reaching a new crisis point. We need to be prepared to tell elected lawmakers that we stand up for first sale, whether the threat comes from arcane import regulations, dangerous legal interpretations, or onerous End User License Agreements. EFF has joined Demand Progress and the Free Software Foundation in giving you a platform to contact your legislators to urge them to stand up for first sale.

Click here to read other blog posts in this series.

December 24, 2012 - Posted by | Civil Liberties, Full Spectrum Dominance | , , , , ,

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