Normally when a consumer purchases a copyrighted work embodied in a tangible object (e.g., a book or a CD) they are completely free to lend or resell that object without the permission of the rightsholder. In the United States, this is called the doctrine of first sale and it has been recognized for over a century. Business practices, prices, and consumer expectations all reflect the assumption that sale of a book is just a regular property transaction. This article discusses how this changes when we switch from tangible objects to digital distribution.
(Also worth checking out, as noted by Barnes, is the IP Colloquium episode devoted to the first sale doctrine.) As Barnes points out, the durability of the first sale doctrine is increasingly being tested in a world where entertainment products (such as books and movies) are delivered not as a physical product but as a digital stream. I used to be able to take my CDs down to the used CD store and sell them once I was no longer interested in listening to them – to what extent, if any, do or should I have the same right if what I purchased was not a physical disc but a downloaded track (or book, or movie, etc.)?
These questions are even more pertinent in Canada because, unlike in the United States, we do not have a clearly defined “first sale” doctrine, particularly with respect to copyright law. Outside the United States, the “first sale” doctrine is more commonly referred to as the concept of “exhaustion” (as in, the sale has “exhausted” the owner’s rights in the product).
Macklin and Leger wrote this report for the International Association for the Protection of Intellectual Property which gives a basic background on the lack of an exhaustion doctrine in Canada. More recently, Jeremy de Beer and Robert Tomkowicz have written “Exhaustion of Intellectual Property Rights in Canada” (not available online, but can be found in the Intellectual Property Institute of Canada‘s journal at 25 Canadian Intellectual Property Review 3). de Beer and Tomkowicz examine recent Supreme Court of Canada cases to tease out the contours of Canada’s “exhaustion” doctrine, and encourage the courts to more precisely define its limits.