First-Sale Doctrine in the Digital Age

Introduction

The first-sale doctrine has been a cornerstone of U.S. copyright law since 1908. This “doctrine”, which gives copyright holders the right of “first-sale” of their work, has had the difficult task of balancing the interests of copyright holders and the interest of the public for over a century.

This doctrine has provided content creators and copyright holders with an enforcable means of being compensated for their hard work and it has facilitated the resale, rental, and lending of legally obtained books and other copyrighted works to the public without requiring the express consent of the publisher to do so.

Unfortunately, the advent of digital technology and the internet has posed new challenges to this doctrine. With a physical book, when you loan it out it is no longer available for anyone else to read. Ebooks are quite different. Copies made of an eBook file will all be identical; no fuzzy letters or generational grain. Each copy is as good as the first.

This leads to a big problem.

If we treated ebooks just like books, any file provided to you would be a copy. Verifying that your ebook was actually deleted from your computer once you returned the book

Publishers in all of their wisdom (and efforts to maximize profits), began LICENSING ebooks instead of selling you a copy of the work. When you pay for an ebook, you only have the right to read that ebook, usually on a single device, with no guarantee of future availability. Publishers have been raising the licensing fees charged to libraries and individuals so excessively in recent years that Congress is now investigating the practice.

The publishers are using the digital distribution of ebooks to make an end-run around a doctrine that has been providing a balance between making money and the public good.

History of the First-Sale Doctrine

The first-sale doctrine originated in the early 20th century with the Supreme Court case Bobbs-Merrill Co. v. Straus (1908). The court ruled that once a copyrighted item is sold, the copyright owner no longer controls its distribution. This doctrine was codified in the Copyright Act of 1976, allowing the lawful owner of a copy of a work to sell, lend, or otherwise dispose of that copy without permission from the copyright holder.

Importance of the First-Sale Doctrine

The monumental impact that the First-Sale Doctrine has had on the dissemination of knowledge to the benefit of humanity cannot be overstated. The following short list touches on just a few of the most important benefits:

1. Enhancing Accessibility and Affordability

It has played a crucial role in enhancing the accessibility of copyrighted works. It enabled the establishment of libraries, second-hand bookstores, and rental services, allowing people to access works without purchasing them new. This has been particularly beneficial for educational institutions and low-income individuals.

2. Fostering a Secondary Market

The doctrine has also fostered a robust secondary market for books, music, movies, and other media. This market has provided additional revenue streams for sellers and wider choices for consumers. It has allowed for the circulation of out-of-print works, preserving cultural and intellectual heritage.

3. Balancing Interests

By limiting the control of copyright holders over the distribution of individual copies after the initial sale, the first-sale doctrine has balanced the interests of creators and the public. It has ensured that once a work is legally purchased, the purchaser has the right to use and distribute it as they see fit, within the confines of the law.

Challenges in the Digital Era

With the rise of digital technology, the first-sale doctrine faces significant challenges. Digital works, unlike physical copies, can be copied and distributed with ease, leading to potential widespread unauthorized dissemination. Technological protection measures and digital rights management (DRM) systems have been employed to control access and distribution, but these measures often limit legitimate secondary uses of digital works.

• Impact of Digital Networks

Digital networks enable the distribution of works without transferring ownership of a physical copy, complicating the application of the first-sale doctrine. The ease of copying digital works has led copyright holders to retain more control over distribution, often at the expense of consumer rights and secondary markets.

1. Create Soroban Smart Contract with following functionality
   1. Checkout
   2. Return
2. Add sample eBooks to blockchain for checkout
3. eBook Checkout process tests
   1. eBook request
   2. check eBook availability
   3. Record availabilty of eBook as checked-out or available
   4. Check-out eBook
      1. Mark as checked-out
      2. Set Due Date
      3. Log address of reader
      4. Generate checkout keys
      5. Encrypt and deliver ebook
   5. Return eBook
      1. Mark as available
      2. Unset Due Date
      3. Invalidate keys/tokens

Our team includes two talented engineers, Chris Robison and Kevin Ready, that together have over 40 years of combined experience using and building web technologies.

Kevin is the author of "Plug and Play Javascript" and has the unique talent of getting new technologies to actually work. You can check out his work history on LinkedIn at https://linkedin.com/in/planetkevin

Chris has been programming since age 15 and hasn't stopped since.  He has extensive experience with web technologies with a focus on the application of technology for business.  During his work journey through the years he has cloned a cat while at Genetic Savings and Clone, architected and implemented an end-to-end transportation management system, and much more.  You can check out his work history on LinkedIn at https://linkedin.com/in/chrisrobison or check out his website at https://cdr2.com