Digital First Sale Doctrine

Matt Yglesias notes last week’s ruling that services like Clean Flicks, which buy Hollywood movies, take out the naughty parts, and resell them to parents, are infringing copyright. On a policy level, I agree with his general take:

Overwhelmingly, the impact of a service like CleanFlix is to make versions of works available to people who otherwise wouldn’t be consuming them at all. Even in a CleanFlix world, authors of “unclean” content will still enjoy extremely close to 100 percent of the pre-CleanFlix market. There’s no reason at all to think that the existence of this sort of service will seriously reduce future production of new things.

Artists and so forth who think their interests are being served by pushing a strong-IP doctrine on this front are essentially dupes. The people who control the existing distribution channels for film have a very serious interest in using the new-style super-strong IP rules to insulate themselves from the winds of technological change. So, in essence, they’re pushing forward on all fronts, stomping on various totally non-harmful cases of putative infringement and attempting to radically curtail people’s ability to do what they want to do with content they’ve purchased.

The defendants’ activities clearly had little or no negative financial impact on copyright holders. Arguably, in fact, services like Clean Flicks increase sales by widening the set of movies socially conservative parents are willing to purchase.

However, on the legal merits, this is hardly an easy case. I haven’t been able to find the actual decision so consider this wild speculation on my part, but it seems to me that a literal-minded interpretation of the four fair use factors very well might find this is not a fair use–the “effect of the use upon the potential market” is the only factor that clearly weighs in favor of a finding of fair use.

Conceptually, the stronger rationale for finding that such editing is legal is the first sale doctrine, which holds that once you’ve purchased a copy of a work, you have a right to do as you please with that copy, as long as you don’t make additional copies. No one would claim copyright infringement if I went into business buying books, blacking out naughty words, and reselling the edited books. Clean Flicks has already paid Hollywood full price for each copy of the movies it re-sells–what business is it of Hollywood’s if they alter the copy before selling it?

The problem is that the first sale doctrine only applies to the physical original copy. But with digital technologies, accessing and modifying content often requires copying it. You can’t modify a DVD–all you can do is burn a modified copy. That means that even if Clean Flicks’s business is analogous to actions that would have been perfectly legal with 20th Century technologies, that doesn’t mean it’s legal. What you’re buying when you buy a DVD is just a physical piece of plastic, not the right to own one copy of the movie stored in the disk. Such over-literalism, it seems to me, is a mistake that threatens to cause a lot of mischief as more and more of our culture is distributed in media where copying is an inseparable part of accessing.

For example, an over-literal interpretation of the no-copying rule was responsible for MP3.com’s loss in court. Even though MP3.com was simply helping users to consume content they had legally purchased in more convenient ways, the judge focused on the fact that MP3.com was copying and “retransmitting” the content without authorization from the copyright holder. That logic eviscerates the first sale principle in digital media, because all manipulations of digital content involve copying and transmitting content.

All of which is to say that Clean Flicks ought to be legal, but it’s far from obvious that it actually is. It would be a good thing if Congress clarified the first sale doctrine to make it clear that it gives consumers the right to consume and modify the content they purchase in the format of their choice, not simply the right to do as they please with a physical piece of plastic.

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