Digital First Sale

Digital First Sale is an issue in copyright law that applies to the use of digital content.

Individuals in the United States have a lot of rights over their physical property. Physical items a person owns like cars and furniture can be sold, repaired, modified, rented out, or lent out. When it comes to creative works, like books, the First Sale Doctrine in U.S. copyright law gives people the right to give, lend, and sell their copies of copyrighted works.

But that is not the case for digital content. In this case, copyright law prevents more than just reproducing; it prevents distributing, modifying, or displaying publicly without permission. The traditional understanding of concepts in copyright don’t work as well with modern technology.

For instance, every time a user runs a computer program, copies of the program are made onto the computer’s RAM.  Making these copies is necessary in order to use the program. As a result, in 1980, copyright law was updated to allow for copies that are “essential steps” of a program’s use.

However, manufacturers have found a way around this. Under current copyright laws, the owner of the copy gets to distribute it without permission from the copyright holder. But in today’s world, when consumers download computer programs or buys discs containing software, they have to agree to an End User License Agreement in the Terms of Service to use it, which typically states “This software is licensed to you, not sold.” This means that the first sale doctrine doesn’t apply. This allows manufacturers to go after people reselling software, but it also allows manufacturers to go after people who were not using the software or program in a harmful way. 

Additionally, the way people exchange works electronically is very different from exchanging physical objects. While selling of physical used media is legal and happens frequently, users in today’s world can’t give away a digital file they no longer want, like a song they have purchased and downloaded, without infringing copyright. It requires the a copy of the file to be created.

Public Knowledge is working to update copyright law to allow for reasonable use of software and digital content.

To learn more check out the following:

Sherwin Siy produced a white paper entitled Copies, Rights, and Copyrights: Really Owning Your Digital Stuff.

Sherwin Siy was featured in a video explaining digital first sale, entitled To Have and to Hold: Owning Copies in a Digital Age.

Sherwin also wrote an informative blog post on the issue of End User License Agreements entitled Software Companies Own Your Hard Drive: Ninth Circuit Rules for Formality Over Function.

Here are the PK experts on this issue:

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