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First Sale Doctrine

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The concept of First Sale in copyright law is the center of libraries, second hand stores, and movie rentals. This doctrine is laid out in section 109 of the copyright code. In the most basic form it lays out that once you own a lawful copy of work that copy is yours to use or dispose of without additional permission from the copyright owner.

There are of course limitations laid out in the law itself. For example in order to engage in commercial leasing or lending of an item the permission of the copyright holder is required. In fact the sale of licenses for commercial lending is a noticeable market in itself. Software and any digital media are also limited so that reproducing a legally purchased piece of software for sale is still copyright infringement.

There are few exceptions, mostly regarding software, that prevent the owner of a lawfully made copy from selling that same copy in the market in of their choosing at a later date without permission from the copyright owner.

First Sale is in the news this week because on Monday the U.S. Supreme Court heard the case of Kirtsaeng vs. Wiley. This is a case where a student had family members in Thailand ship him copies of a textbook that had been priced for the Thai market. On recipient of the books he then sold them for more than the price in Thailand, but less than the price set by Wiley for the United States market. Wiley sued under the logic that things made for the Thai market could not be sold in the United States without their permission. A lower court’s decision was based on the logic that “lawfully made” limited First Sale to things made in U.S. terrority and found for Wiley. We can expect the Supreme Court’s decision sometime in the summer.

This is a judgement that E-Bay, Amazon, and anyone else that deals in the sale or lending of copyrighted materials will be reading closely. Even car dealerships are curious to find out if someone trying to trade in a Mini will need permission for BMW (the current parent company).

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