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First Sale Doctrine

In a 6 to 3, non-ideological and bi-partisan decision, the Supreme Court has upheld the “first sale doctrine”; a decision which will have far reaching implications. The “first sale doctrine” basically says that if you legally buy something, then you own it and can do what you wish with it. It is what allows libraries to lend out books that they purchase, video rentals, and allows you to sell your legally purchased books and CDs to others. Seems simple, right?

And yet, copyright holders have long tried to control what you can do with copyrighted works, even after you buy them. In the case in question, a student from Thailand attending an American university was fined $600,000 for selling eight textbooks that were legally purchased in Thailand and which he then sold on eBay to fellow students in the US (to help pay for his education). The award was upheld by an appeals court, which said that foreign copies are not allowed to be resold in the US without the permission of the copyright owners. The case then went to the Supreme Court, which struct down the lower courts.

Unfortunately, while Forbes magazine applauds the decision, they point out that the decision might soon become moot as publishers exploit loopholes to do a run around of the first sale doctrine.



  1. Richard wrote:

    Things get a little sticky with, for instance, music and photography. If I buy a song do I then have the right to use that song as part of my own song that I then resell? Remixing tracks is now commonly done but I’m not sure how I’d feel as a producer of original music: flattered or ripped off.

    If Shepard Fairey buys one of my photographs, does he then have the right to use it as the basis of a poster that he resells? I know he didn’t buy the Obama image in question, but I’m not so sure the law ought to change if he had.

    For more on this see

    I agree, copyright law is out of control, unless you’re the person who made the original creative work and is attempting to keep some control over the way its used.

    Thursday, March 21, 2013 at 6:31 am | Permalink
  2. Iron Knee wrote:

    Richard, your questions are good ones, but they have nothing to do with the first sale doctrine. The first sale doctrine does not say you can make copies of copyrighted material (modified or not), it just says you can sell it to someone else.

    Thursday, March 21, 2013 at 7:11 am | Permalink
  3. Richard wrote:

    Sorry IK, I do get that and I support the loaning and/or reselling of things we own and don’t want publishers making conditions for that.

    My concern is how various individuals interpret ownership and the rights that come with it.

    Thursday, March 21, 2013 at 8:23 am | Permalink
  4. DaddyO wrote:

    I have to deal with copyright in my job and it is quite apparent it is an old broken down goose that should have died decades ago, but is kept on life support by shovel-loads of money from Big Publishing.

    I’m fortunate that I get to break copyright legally in the academic world and do an end run around the madness, at least for textbooks, but that’s only for a minority of consumers.

    CreativeCommons licensing seems much more sensible, on the surface. I have not looked into it in-depth.

    Thursday, March 21, 2013 at 9:44 am | Permalink
  5. Michael wrote:

    I’m not opposed to copyright law (since others mentioned it). It serves a vital purpose in addressing market failure. That is, at this point in time, we do not have an adequate market structure for the sale of intellectual property. Specifically, the cost of reproducing and distributing content on a large scale is too cheap to provide an economic barrier to freeloading. Social mores accomplish part of the task by guilt tripping people who download free copies of things, but they alone are insufficient. Furthermore, social mores are influenced by the legal status of actions; eliminating copyright protections WILL weaken the guilt effect and encourage even more piracy.

    Having said that, our existing IP laws are in desperate need of revision. The anti-circumvention provisions of the DMCA do more harm to consumers than they do good for IP protection. The potential fines, which do not have to be tied to actual monetary loss, are absurdly disproportionate. Innocent infringement as a defense should be expanded. Congress needs to stop granting the Disney extension (whenever the copyright on Mickey Mouse is about to expire, they extend the lifetime of copyrights). Software and business processes should not be patentable, nor should naturally occurring phenomena (e.g., genes). But these are all things that could be fixed by a functional (cough, cough, laugh, laugh…) Congress.

    Side note: I do a lot of GOP bashing when it comes to Congress’s disfunction, but the Dems are often worse when it comes to copyright issues. This is a side effect of their close ties to Hollywood and socially liberal content providers.

    Back to the original issue of the Kirtsaeng decision, I don’t think this is as simple of an issue as IK described it. It’s not just the first sale doctrine that was involved. The more important issue was the effect of import and export regulations. The question was: Should one be able to buy massive quantities of an item overseas and import them into the U.S. for the explicit purpose of resale, without the consideration of copyright law? It’s not a trivial question.

    There is a negative side effect here, which is that it creates an incentive for U.S.-based companies to close up shop and move to countries with cheaper labor. Instead of manufacturing the books here and selling them to foreign markets, move the manufacturing to foreign markets and import them for sale here. More additional net loss of U.S. blue collar jobs. Congress could easily fix this by imposing a tariff (which also raises the cost for people like Kirtsaeng), but that could spark a trade war. The publishers could also address this, by raising their prices overseas. This would produce fewer sales overseas, leading to more piracy.

    In short, I’m always suspicious of any claim that anything regarding intellectual property, copyrights, patents, import/export laws, etc., has a straightforward and obvious solution.

    Thursday, March 21, 2013 at 10:59 am | Permalink
  6. Michael wrote:

    By the way, here’s a link to the decision:

    I find Ginsburg’s argument very compelling. The key point is this: “The Copyright Act, it has been observed time and again, does not apply extraterritorially.” As these books were printed outside the U.S., then the U.S. copyright laws–including first sale–do not directly apply. Instead, these books were “lawfully made” subject to some other country’s copyright laws. So the question is, does the importation of these books automatically make them subject to U.S. copyright laws–including first sale–, when they weren’t before? Precedent says no. According to Ginsberg, “The text of the Copyright Act demonstrates that Congress intended to provide copyright owners with a potent remedy against the importation of foreign-made copies of their copyrighted works.”

    This decision by the Court could have some interesting side effects. If there is a sovereign state that makes all digital works freely distributable, what happens if someone decides to import copies? That is, person X, while present in this country, illegally downloads millions of MP3s. However, he now copies all of these onto a new hard drive. According to his country’s copyright laws, this is perfectly legal, so these copies were “lawfully made” subject to his country’s laws. He now puts them all onto some cheap medium. For instance, he burns DVDs that each contain ~1000 MP3s. He then brings these DVDs to the U.S. and sells them for $1 each. Is this legal?

    In one regard, his original copies were pirated and illegal under U.S. law. However, the copies were made legal by his country’s laws. According to the language in Kirtsaeng, he can now legally distribute these DVDs in the U.S. subject to first sale provisions. As long as he burns all of the DVDs overseas, this action is legal.

    That’s actually a bit of a radical departure from precedent.

    Thursday, March 21, 2013 at 11:34 am | Permalink
  7. Duckman wrote:

    I immediately think of the gaming industry. Might not be at the moment, but soon game makers are going to put one time activation codes in games, rendering the game useless to resell.

    Thursday, March 21, 2013 at 1:21 pm | Permalink
  8. ThatGuy wrote:

    To Duckman’s point: a lot of game publishers are switching to online distribution for PC games, meaning you set up an account with them and buy games through their software. No way to resell those, and if their service ever goes out of business, you could be out of a lot of money in games you bought, but don’t technically own.

    Thursday, March 21, 2013 at 3:48 pm | Permalink
  9. Mark wrote:

    Michael’s comments get to the heart of the matter. After all, would one feel the same about this case if it were 8,000 textbooks? Can he just set himself up as a bookstore on Amazon?

    Thursday, March 21, 2013 at 6:47 pm | Permalink
  10. Max wrote:

    This seems kind of similar to the drug re-importation issue. It’s explicitly illegal for U.S. citizens to buy drugs (mostly made in the U.S.) from, for example, Canada.

    Likewise, Congress could make it illegal for U.S. citizens to buy cheaper books from other countries.

    This would enable the books to be sold more cheaply in other countries without hurting U.S. sales.

    Thursday, March 21, 2013 at 6:56 pm | Permalink
  11. Iron Knee wrote:

    Why do people keep bringing up examples that involve making copies and selling them? That is specifically not part of the first sale doctrine. First sale just means that if I buy something (and it doesn’t matter if I buy it here or somewhere else, as long as it is legal), then I can resell it in the US to someone else, or even lend it to someone (like a library does).

    Specifically about Michael’s example, that is a red herring. If a country suddenly made it perfectly legal to copy anything, then companies would be free to NOT sell their works there (and certainly would stop). Then the reimported copies could not be legally purchased. end of problem

    I am definitely NOT against copyright law. I own quite a few copyrights and I defend them. I am against what our copyright laws have become.

    Friday, March 22, 2013 at 2:33 am | Permalink
  12. ebdoug wrote:

    I wonder about my videos I own at Amazon. I give out my sign in name and password to family so they can watch my Downton Abby and Midsomer Murders. I haven’t read any disclaimer that I can’t lend my videos out.

    Friday, March 22, 2013 at 6:34 am | Permalink
  13. Michael wrote:

    IK, you missed one point: Sure, the companies are free to not sell their works there. But that doesn’t mean they won’t get there via piracy, outright theft, etc. Once they’re there, any copies that get made become “lawfully made” according to that country’s laws. These copies can then be sold in that country to a middle man, forwarded to the U.S. and first sale suddenly applies.

    I wasn’t accusing you of being against copyright law. I was just pointing out that the reasoning of the majority opens the door for a loophole.

    Friday, March 22, 2013 at 9:08 am | Permalink
  14. Iron Knee wrote:

    Michael, it doesn’t matter. Even if they are legal in that country, we already have protections that say they would not be legal in ours. For example, there are countries where bootleg recordings of concerts are not illegal, but customs will seize those recordings (or copies of them) if you try to bring them into the US, because they were not authorized by the copyright holder. I still think your argument is a red herring.

    Eva, I’m sure if you asked the copyright holders, they would tell you that what you are doing is illegal. That, of course, doesn’t mean it actually is. We invite friends over all the time to watch movies with us, and they usually bring potluck food to share in exchange. I’m probably violating some provision of their license when I do that.

    Friday, March 22, 2013 at 2:15 pm | Permalink
  15. Michael wrote:

    I understand that. But read the decision. The language opens the door for challenges to those seizures, because of its novel and vague notion of what “lawfully made” means. Under the precedent of Quality King, those seizures are justified because U.S. law does not apply extraterritorially. Kirtsaeng reverses that.

    Friday, March 22, 2013 at 3:22 pm | Permalink
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    Sunday, April 21, 2013 at 6:25 pm | Permalink