Toward a “Digital Transfer Doctrine”? The First Sale Doctrine in the Digital Era

Reis, Sarah | October 1, 2014

The first sale doctrine in copyright law allows a person who owns a copy of a copyrighted work to sell, lend, or give away the copy to someone else. An owner of a copy of a copyrighted work can take advantage of the first sale doctrine, but a licensee cannot. In today’s digital environment, people are increasingly purchasing digital music files and e-books instead of CDs and physical books. Customers often mistakenly believe they become owners of the digital content they purchase when in actuality they merely become licensees most of the time. Licensing agreements impose use restrictions on digital content. As licensees, customers are unable to invoke the first sale doctrine and legally resell or transfer their digital content to others. This Note explores the feasibility of applying the first sale doctrine to digital content and concludes that a better solution would be to operate a digital secondary marketplace outside the scope of the first sale doctrine. This solution is referred to as a “digital transfer doctrine.” A digital secondary marketplace that provides a portion of revenues from secondary sales to the copyright holders most effectively balances the interests of both consumers and copyright holders.