License With Care

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The Ninth Circuit Court of Appeals has recently issued a pair of opinions fleshing out a principle in copyright law known as the "first sale doctrine." The principle traces its roots to the 1908 Supreme Court opinion of Bobbs-Merrill Co. v. Straus. It is currently enshrined in statute and provides in basic part, "the owner of a particular copy or phonorecord . . . 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." 17 U.S.C. 109(a). The first sale doctrine is well settled in many circumstances, such as with books. When you buy a book, you are free to do whatever you want with the particular copy you purchased. Read it, burn it, lend it, make paper airplanes out of it, and, significantly, resell it--even for more than you paid for it. You own your copies of your books free and clear.

While operation of the first sale doctrine is clear when it comes to traditional books, these recent Ninth Circuit cases establish that the doctrine is still a bit murky when it comes to such relatively longstanding media as software and music. The first sale doctrine does not apply to licensed copies of particular works (as opposed to owned copies), and copies of both software and musical works are often licensed rather than sold. This is important. If a copyright owner has properly licensed copies of its works, it will likely be able to control downstream transactions involving the copies. If it has instead sold copies of its works, it will not be able to control downstream transactions involving the copies.

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