“First Sale” Doctrine – Keep it to “Sale” and Don’t Extend it to “Use”

You’ll have to listen to the latest Tech Liberation Front podcast to get the full
thought-provoking discussion on copyright law and the first sale doctrine, but
let me tease out a portion of the discussion on extending the first sale to apply
to use in addition to transfer.

The main focus of the podcast is a case Fred von Lohmann and EFF are defending concerning the "first sale" doctrine of copyright law. Fred describes first sale on the EFF website:

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).

While Fred’s right when he says "you bought it, you own it" that doesn’t mean you can do anything you want with a copyrighted work. First sale
currently only applies to transfers of the copyrighted good. Fred said in the podcast that he would like to see the first sale doctrine expanded into the area of "use."  Extending it to use means content owners
couldn’t use a copyright license to enforce certain use restrictions, such as the sharing and presentation of copyrighted material. Although this wasn’t mentioned on the podcast, I think this would have the effect of expanding "fair use." 

Fred surely thinks this liberal copyright world would benefit consumers and society writ large – but it would come at some costs, too. The reality is that content creators would impose use
restrictions in other ways, especially for legitimate price and market segmentation (ie. for software, discounted OEM copies are often labeled "not for resale" to avoid competing with the normal retail channel). This would have to be done by using contract, not copyright law.

If we rely more on contract instead of copyright rules, would there be a
click-wrap agreement every time a music listener inserted a CD or played an
audio file on an iPod? This may be an extreme example, but keep in mind that the first-sale doctrine was meant to reduce the
transaction costs of contacting the copyright owner every time the copyrighted
product is sold and resold. Moving toward contracts to replace licenses for use
agreements would increase transaction costs because it would require more contract-like manifestations of assent (ie. shrink-wrap and click-through agreements). 

No system is perfect, and the law is often called-upon to
create artificial constructs to solve practical, real-world problems. I like the current framework that allows copyright owners to rely on copyright for default rules, but allows them to grant more freedoms via licensing. Just look at the Free Software Foundation’s GPL license. It is permissive in some ways (allows for the modification of code) but restrictive in others (the GPLv3’s anti-tivoization provisions that require any consumer product using software licensed under the GPLv3 to “open up” the software).

As I said in the podcast, I’d hate to see a broader use right come afoul of licensing schemes we see in the software industry, an industry that relies heavily on copyright. And as Professor Picker said on the podcast, competitive markets will yield optimal results without the need to change copyright law, where consumer demand for less use restrictions will be met by producers supplying products to meet that demand.

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