Exhaustion of Copyrights based on Sale

Rights under Copyright Law

A copyright owner automatically receives a number of different rights when they create a copyright work.  Those rights include the right of reproduction, public display, distribution and the right to prepare derivative works.  For some types of work, this also includes the right of public performance.  However, when an owner sells a copyrighted work, they lose the ability to control the resale or further distribution of the work. This is referred to as the first sale doctrine.

The First Sale Doctrine

The first sale doctrine is a legal concept that limits the rights to control content after a work has been sold. The first sale doctrine states that once a copyright owner sells a copy of his or her work to another, the copyright owner relinquishes all further rights to limit or control the sell or other disposition of their work.

A distinction not always recognized is that ownership of the physical item, such as a book or a CD, is not the same as owning the copyright to the work embodied in that item. Under the first sale doctrine, ownership of a physical copy of a copyrighted work permits the owner of the item to lend, resell, give away and destroy the copyrighted item, but the owner is not granted the right to copy, reproduce, prepare derivative works or publicly display or perform the work.  The transfer of the physical copy does not include transfer of the copyright in the work. This same legal principle applies to tangible items as well as intangible or digital content.

The first sale doctrine allows the purchaser to transfer a particular, legally acquired copy of the work without seeking permission from the copyright owner. The distribution rights of the particular copy of the work terminates once the copyright owner sells the copy.  The first sale doctrine however prohibits renting and leasing recorded music and computer software, although private non-profit archives and libraries are allowed to lend these items provided they include a copyright notice on the copy.

If you have questions regarding the application of the first sale doctrine and how it applies to your situation, please contact one of our attorneys.