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

Put on the Black Hat

[edward.virtually@pob]

When Rights are Outlawed, Only Outlaws will have 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.

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

[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.

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.

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.