Does First Sale Still Exists?

3-State Bit asks: "Ah, the doctrine of First Sale. (Sources two, three, and especially, four). The last bastion of fair use. Or is it? In a highly insightful comment, user Kjella explained to me that I had been naive to think that First Sale would continue to exist in the world of DRM. (Of which I had pondered the ramifications here.) So Slashdot, where does the First Sale doctrine stand? Are libraries throughout the nation in jeopardy? Will they no longer carry digital media? Can a corporation, without any form of legal safeguard, really control whom I can sell my stuff to? It's enough to make you shudder."

Comments

Naivety

[Zapper]

As much as I would like to share in your naivety I am pretty sure that we will end up getting screwed again in the name of [national security|big bucks|].
There's always underground markets though...

Put on the Black Hat

[edward.virtually@pob]

When Rights are Outlawed, Only Outlaws will have Rights.

Re:Put on the Black Hat

[Yottabyte84]

Rights do not exist without law to back them up. Thus, the outlaws won't have any rights.

Hmmm...

[C0LDFusion]

One thing I found interesting is that one of the sources that the article lists says that DVD's and software are not covered under First Sale. But funny me, I have a used computer parts store nearby that has used software near the front (which I use often, because I'm able to find old software I like, like the copy of Blade Runner I grabbed 6 months ago). And there's not a pawn shop in my city that DOESN'T sell used DVD's. Some of the guys even have the gall to re-shrinkwrap them!

Such concentrated violations of Copyright Law aren't bringing much attention to my city here (and it's big and close to DC).

However, I think the taking away of rights out there is definately in different "zones". It's like in the game Jenga. When you're pulling pieces away, you always take pieces that won't make the block tower fall. They're taking away our rights, but they don't want a collapse of the system. They just want to scare everyone enough to the point of taking it up the ass everytime we wanna listen to the latest music.

Re:Hmmm...

[eht]

Considering how Microsoft went after ebay for copies of it software, you'd think the MPAA would go after it for DVD's if they fell under First Sale, or Half.com or Amazon's used section or, well the list goes on for quite a while

Copyright licensing versus Sale

[Twylite]

I don't believe the Doctrine of First Sale has ever been properly tested with respect to Copyright law. The central question is: why "purchasing" a copyrighted product, are you purchasing a license, or merely paying a license fee? An important concept which must also be brought up is that of a "sale", which is usually read to means a transfer of ownership.

In the former case, the license is a right to use the copyrighted content and associated media, while the copyright holder reserves all other rights. The copyright holder in this case has created a (potentially unlimited) number of discrete licenses, all of which are offered for sale. After purchase, The Doctrine of First Sale says that the copyright holder has benefitted from the sale, and that you can then sell that license to someone else. Of course, that sale is a transfer of ownership, so you no longer have the license and the rights to use the copyright content.

In the latter case, there is no sale. You pay a fee for a service or more specifically a right - the limited right to use some copyrighted content subject to a bunch of restrictions. There is no transfer of ownership, only a temporary grant of permission (temporary may extend to your natural lifetime, but who's counting?).

So I believe the question is: does Copyright law permit a license fee model, or does it require the sale of discrete licenses? Is there any other applicable law which forces one of these models; or which causes Copyright to not apply if one of these models is employed?

Being NAL (not a lawyer), I can't answer these questions. However, I do have some comments on South African law (which may not be similar to US law in this regard): the law recognises that Copyright allows the holder to reserve the rights of reproduction, publication (including transmission, boardcast and performance), and letting; it explicitly permits fear dealing for personal use with regard to literary and musical works; and makes no assumptions about the manner in which licenses are granted. It does however use the phrase "a license" extensively, which could be taken to mean a discrete license, rather than a permission.

Re:Copyright licensing versus Sale

[GavK]

You'll find that the answer is in the name: CopyRIGHT (IE The right to make copies, the publisher has it, you don't.

Once you buy a legally made copy, you can sell it, burn it, do anything you like with it. It's yours.

Don't buy in to the big medias utopia...

Re:Copyright licensing versus Sale

[sql*kitten]

In the latter case, there is no sale. You pay a fee for a service or more specifically a right - the limited right to use some copyrighted content subject to a bunch of restrictions. There is no transfer of ownership, only a temporary grant of permission (temporary may extend to your natural lifetime, but who's counting?).

It's easy to disprove this. If you had in fact bought a license to the content rather than the media it was stored on, then:

• Lost, stolen or damaged media would be replaced for a nominal cost by the publisher, provided you could prove you did once own it, so you can continue to enjoy the content you have paid for.
  
• Upgrades to new formats would be provided by the publisher for cost of media, so you can continue to enjoy the content you have paid for, even though you physically bought a record and would now like a CD. You could own the same content in as many different formats as you like, since you are licensed to the content for no more than the additional cost of the media itself.
  

Neither of these happen; a CD or a DVD is treated just like an ordinary product. If it's damaged when you bought it, the store will replace it, just like they would for a washing machine or a pack of bagels. If it's lost or stolen, then either you or your insurance company will be paying full price for a brand new one. If you want it on a different format, even if you physically relinquish your original media, you will still have to pay full price for the new media.

The media publishers want to have their cake and eat it - all the money from product sales, none of the responsibilities of license sales. I predict that eventually case law will force them to choose one model or the other.

Re:Copyright licensing versus Sale

[Twylite]

Bullshit. Read the history of Copyright, and you'll find that the name is a complete misnomer, and doesn't represent the rights nor the intended rights of the law.

Copyright is intended to reserve to the holder the rights of publication. That's it. It was also formulated to apply to written works, which is why it dealt specifically with publication. The act of publication combines reproduction and distribution, and usually commerce. The intent was to allow the copyright holder control over the more powerful groups which were able to publish.

The question of copying was never intended to be part of copyright law. Copying does not hurt anyone in the chain so long as there is no associated distribution. A million CDs in your basement doesn't hurt the musician until you attempt to distribute those CDs.

The whole issue is whether or not you buy anything. When you "buy" software, have you really bought it? Current legal opinion says no - you are restricted by the license, because those are the terms on which the copyright holder is prepared to grant you permission to enjoy his/her rights. Can you transfer the rights you are granted under that license? Yes, unless the license forbids it, in which case no.

So what makes software any different from musical or literary works? Is there anything which stops a musician or author placing a restrictive license on their work? In all likelihood, no. Copyright law does not say they have to sell a license; it doesn't even say they have to grant licenses.

IF they choose to grant licenses, they may grant any combination of their rights they please, and they may subject you to a legally binding contract. A sale, for your information, is a legally binding contract. So is a service contract which permits limited repetition or limited duration use of a work.

So tell me, when you buy a CD, what rights do you acquire? Well common law says that you can do whatever you want with the physical media, because ownership has transferred to you. But intellectual property rights still apply irrespective of the physical media. Common law will then say that any fair use of the CD is game.

Since the intended use of a CD is arguably to be played so you can listen to music, its safe to assume your purchase gives you that right. Resale? Maybe. Copyright provides that any non-exclusive license granted by the holder may be revoked at any time (scary huh?), which raises some interesting legal problems: the holder's responsibility if (s)he revokes the license is to refund any amount you paid, possibly less pro-rata use of the content, since this is a common law approach to recalled products. Note that the responsibility is to YOU. If you have sold your CD to a third party, the contract (and license) is not necessarily transferred to the third party (in the same way that warranties normally only apply to the first owner). While you can sell a second hand washing machine without passing on the warranty, you can't sell a second hand CD without passing on the content.

In a simple world, you could buy a CD, and it would be yours. We don't live in a simple world.

Re:Copyright licensing versus Sale

[Royster]

The First Sale doctrine is a well established matter of law. Even prior to its codification in Title 17, the First Sale doctrine was used to overturn attempts to turn sales of copyrighted works into licenses. The case Bobbs-Merril v. Strauss was settled by the Supreme Court almost 100 years ago on similar facts. Bobbs-Merril, a publisher, printed a license in the books that it sold stating that they could not be resold to the public for less than the price specified by the publisher. Strauss, a retailer operating the Macy's department stores, bought lots of unsold books on the secondary market and resold them at a discount. They were sued and the decision stated that once a copyrighted object was sold, the copyright owner had exercised his right to vend and could not control further sales.

What has not been litigated, to my knowledge, is the claim that Copyright preempts many common software licensing terms and that with the purchase of a lawfully made copy, one receives all the rights necessary to install the software and to utilize it. Since one can not condition acceptance of a license on acts which the buyer has the right to perform, these kinds of claims should be preempted.

Re:Copyright licensing versus Sale

[Twylite]

I'm glad to see there had been a predent of this nature :) Unfortunately, this precent is very old. While that in itself is not a problem, the Copyright Act has changed since this ruling, with revisions in 1909 (a year after this case) and again in 1976, and several subsequent amendments.

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

The original ruling deals with a clause in copyright law which reserved the right of vending for the copyright holder. The clause is mostly the same, as (3) talks about the right of sale. This is a Good Thing, as in all liklihood the precedent will apply.

Unfortunately, I live in South Africa, and our Copyright Act does not contain a reference to sale. All rights of reproduction, publication, etc are reserved; the holder must grant a license for use, and there is no indication of the requirement for or form that such license must take.

Unless EULAs are struck down, First Sale is dead.

[macdaddy357]

They claim when I buy software of DVD, all I get is licence to use it no sale has taken place. I hope that the courts won't let them get away with this nonsense. If I pay for someting, and then take it out of a store, and I won't be returning it after a certain time, that is a sale. End of story.

Re:Go back to school please.

[Anonymous Coward]

I don't know whether you are a troll or not, but you are utterly wrong.

"whom I can sell my stuff to" is perfectly acceptable, except for the dangling preposition but that's a different matter. When the "who" is the object of the expression, they become "whom". It doesn't matter what order the words are in. Of course "whom" is not much used these days, but one is still free to use it. In this case it was correctly used.

If you would like a further patronising lesson in grammar, feel free to post a response to this comment.

First sale: profitable to the copyright holder.

[jolshefsky]

Consider the case of my Chumbawumba "Tubthumper" CD. I don't remember what I paid for it, but let's say it was US$12. I listened to all 12 tracks once, and have gone back to the Tubthumper track 6 more times (approximately...) Thus, I paid US$12/18 = US$0.67 per listen to each track.

If I were to pay for songs on a per-listen-per-track basis, I'd certainly never pay US$0.67 each ... I'd probably only be willing to pay US$0.05 or less. In fact, with that particular CD, I'd only have listened to the Tubthumper track 6 times.

Thus, under First Sale I paid $12 but under a licensed system at $0.05 per song, I'd have paid $0.30. In other words, I'm willing to pay an $11.70 premium just so I can do as I please with the media.

/. has been extra sloppy this week

[Anonymous Coward]

Okay, I have nearly given up on expecting a reasonable attempt to use correct grammar and spelling in the article, but I think at least you could at least try to keep the headline following the basic rules of grammar.

Re:/. has been extra sloppy this week

[Anonymous Coward]

fwiw, my submission's title read "does First Sale exist?" (No "still", or -s).

hahaha exists

[Anonymous Coward]

hey everybody does this post exists?

Does object agreement still EXIST?

[LaminatorX]

When last I checked, "First Sale" was singular.

Where is grammarnazi when we need him?

Re:Unless EULAs are struck down, First Sale is dea

[bwt]

That claim is made with respect to software, but not with respect to DVD's. There is no "licence" on a DVD.

The current state of EULA enforcement is very evenly divided. The 5th and 3rd Circuits have ruled EULAs are not enforcable. The 7th and Federal Circuits have ruled they are enforcable (the Fed Circuit case is being appealed -- we'll see). The 9th Circuit hasn't squarely addressed the issue, but "good" precedent exists there to draw from -- a bankruptcy case there says "manifest assent" is required to form a contract, and the recent Adobe v Softman district court case ruled that the transactions to retailers are "sales". This doesn't settle the issue, but it certainly puts clouds in the "licence" crowds sky.

They need to stop

[xagon7]

the DMCA and such arn't the problem...

"the more you tighten your grip, the more star systems will slip through your fingers"

The REAL problem, and the one Geeks should be spearheading is intellectual property restrictions in the form od Patents and Copyright

I believe the 2 are necessary, just not as long as they think.

Books, CDs, etc, are NOT licensed, just sold.

[ChaosDiscord]

So I believe the question is: does Copyright law permit a license fee model, or does it require the sale of discrete licenses?

You're starting with an incorrect assumption: that when I purchase a copyright protected work that I've purchased a license of some sort. That is not the case (in general). If I purchase a book from my local bookstore, I don't need any license of any sort to read it, loan it out, read it to my kids, tear out pages I don't like, give it away, write witty comments in the margins, or resell it. In fact, just about the only thing I can't do distribute copies of the book. That retriction has nothing to do with a license and everything to do with copyright law.

The Doctrine of First Sale isn't about transferring a license, it's about transferring physical property. I purchased this book / CD / DVD / lithograph fair and square, that particular copy is now my property. As my property, I'm free to dispose of it as I wish, including reselling it or loaning it out.

The copyright industries are trying to spread this misunderstanding. They want citizens to believe that people aren't actually allowed to own anything. Once you've convince people that they don't actually own any of the shelves of books, CDs, DVDs, it's an easy step to convince people they loaning out works, or reselling works is illegal. Fight the misinformation!

(To be fair, some works are licensed, not sold. With the exception of the relativelt immature software industry, you sign contracts to acquire these licenses. There is no confusion that you're purchasing a license, not a copy of the work.)

Re:Books, CDs, etc, are NOT licensed, just sold.

[Twylite]

The only thing that permits you to enjoy the copyright holder's rights, under copyright law, is a license granted to you by the copyright holder. In copyright law the concept of sale deals exclusively with the sale of copyright (i.e. transfer to another copyright holder); the only alternative to this, in which the original holder retains his/her copyright, is a license.

When you purchase any items in which copyright subsists, you gain an implicit license to use the copyright content. That license and its extent is governed by common law, and is generally taken to mean that you have a limited set of rights over a particular copy of the content.

This is distinct to owning the content, or licensing the content. In the former case, you would enjoy a number of additional rights, including that of letting (see below). In the latter, the supplier would have to supply you with the content in alternative formats at cost, replace damaged media at cost, etc. Neither of there happen.

You are explicitly wrong about loaning out the item you purchased. This is one of the reversed rights under copyright law, the same as reproduction, publication, broadcast, etc. You cannot let any copyright work without permission. Most countries have blanket exclusions for public libraries and certain cinemographic works, but that's it.

Re:Books, CDs, etc, are NOT licensed, just sold.

[Fulcrum of Evil]

When you purchase any items in which copyright subsists, you gain an implicit license to use the copyright content. That license and its extent is governed by common law, and is generally taken to mean that you have a limited set of rights over a particular copy of the content.

When I buy a book, I own the book. I do not license anything, and the thing that allows me to use its contents is the fact that it's my book.

You are explicitly wrong about loaning out the item you purchased. This is one of the reversed rights under copyright law, the same as reproduction, publication, broadcast, etc. You cannot let any copyright work without permission. Most countries have blanket exclusions for public libraries and certain cinemographic works, but that's it.

Actually, he's right. According to the us copyright code, the only thing banned is loan of a particular copy for commerical advantage. You can still loan a book to your friend. The reserved rights you refer to specify loan as a possible method for publication, but that's a fair bit different from loan of an already published copy.

Re:Books, CDs, etc, are NOT licensed, just sold.

[ChaosDiscord]

Your message contains a number of clearly wrong statements. At least, wrong given my fairly large assumption: that we're discussing United States law. If you're discussing a different country, my apologies, I know very little about other countries copyright laws beyond the general guidelines set down by the Berne Convention.

The only thing that permits you to enjoy the copyright holder's rights, under copyright law, is a license granted to you by the copyright holder.

Sure enough. Of course under copyright law the rights exclusively granted to the copyright holder boil down to the right to distribute new copies. There are a few other details like restrictions on "public performance," but in a nutshell copyright is about limiting who is allowed to distribute copies.

Feel free to check out the U.S Copyright Office's "What is Copyright?" It's a pretty good summary of what the copyright holder's rights are.

In copyright law the concept of sale deals exclusively with the sale of copyright (i.e. transfer to another copyright holder); the only alternative to this, in which the original holder retains his/her copyright, is a license.

That is erroneous. There is a third option, the option used in 99% of all transactions involving a copyright protected work. This option is used whenever you visit a local store and purchase a book, CD, or DVD. With this option, I purchase a single instance, a single copy of the work. Copyright remains with the original holder. That particular copy becomes mine, it is my property, and I'm free to dispose of it as I wish. This is only restricted by laws governing my actions. Under the DMCA I'm not allowed to break any encryption on the DVD. Under various laws, I'm not allowed to sharpen the disc into a razor point and kill people with it. And under copyright law I'm not allow to make copies and distribute those newly made copies. Beyond various laws like that, I'm free to do a great deal with my property, be it a chair, a car, or a DVD. I can resell it, loan it out, give it away, destroy it, make copies for personal use, will it to my inheritors, look at it, show it to my friends, or throw it away.

Unless a law specifically forbids me from doing something, I'm legally allowed to do it. Copyright law specifically forbids be from distributing new copies of works protected by copyright. (Unless I am the copyright holder, in which case even that restriction is lifted.) Copyright law specifies no licenses, be they implicit or explicit.

Again, please check out the U.S Copyright Office's "What is Copyright?" You'll notice the decided lack of commentary on licenses, loans, and other powers you have incorrectly assigned to copyright holders.

Re:Books, CDs, etc, are NOT licensed, just sold.

[Twylite]

At the time I wrote this I made the mistake of referring to local (South African in this case) law; it deals very prominently with the concept of licenses. US law doesn't, now that I look, and its effect is therefore somewhat different.

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

Title 17, Chapter 1, Paragraph 106

This is the most significant of the rights reservations given by copyright law. Does the Doctrine of First Sale trump it? No. How do we know? Because disposal is explicitly permitted in recognition of this doctrine (i.e. considering is given under US law for this doctrine):

109 (a) Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, 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

While "dispose" is not defined by the act, the remainder of paragraph 109 implies that the right to lease in included. HOWEVER: 109(b)(1)(A) prevents any letting of phonorecords (any musical recording) or computer software for direct or indirect commercial gain. So loaning (to friends, for free) is acceptable; bookclubs are most likely acceptible because they don't tend to be for commercial gain; but letting/renting would not be acceptable.

US law does seem to centre around the concept of a "copy" being some unit in which a copyright holder can work. South African law, by comparison, doesn't -- in fact it hardly uses the word "copy", preferring "license". My mistake for not having read through the US law before responding.

Re:Books, CDs, etc, are NOT licensed, just sold.

[ChaosDiscord]

Actually, it's interesting to hear how other countries handle things. I don't envy you your laws, especially if, like in the United States, things like the design of buildings, cars, and chairs can be copyrighted.

Re:Books, CDs, etc, are NOT licensed, just sold.

[Twylite]

I'm not too familiar with the South African intellectual property laws other than Copyright. But I know we do have a separate law which covers designs (logos, architecture, etc), which are not covered by copyright. Other designs will come under patent law rather than copyright. You would most like have to argue that a particular design is art rather than functional to claim copyright instead of a patent.

If you're interested, the full text of our Copyright Act (with amendments) is available online.

Re:*Highly* insightful?

[Anonymous Coward]

point is, s/he called me a troll.

Re:Go back to school please.

[DEBEDb]

Fuck you.

Grammar lesson, please?

What if I die?

[Anonymous Coward]

Can the license be transferred as part of my estate? Or does my DVD collection become worthless in an estate sale?

Mmm. Philosophy.

[edward.virtually@pob]

Objectivists may agree with you. Others side with those moral systems that hold the existence of Rights to be separate from the existence of their enforcement or even active suppression. Thank goodness.

Re:Mmm. Philosophy.

[Anonymous Coward]

Being an Objectivist myself, I have to disagree with you, Edward. Rights are the conditions needed for human beings to live as human beings. A human being possesses the absolute right to own his life, his mind, his labor, and the values he earns no matter what the law says. The law may violate an individual's rights, but it cannot abolish them. Go to SOLO for more, if you're interested, but beware the dogma of the Ayn Rand Institute.