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Patent law: Rules governing the first sale doctrine

by Jim J Jones

Created on: June 17, 2010

A copyright is a legal construct that allows the developer of an intellectual or artistic work to actually own the work in question, and by extension any reproductions. That is legalese that basically says that if you write a book, or create a movie, you not only own the version of it that you made, you also own any copy made by anyone, ever. You have the exclusive right to manufacture and sell your book, or movie, or painting. Any others who do so are stealing from you, and you are allowed to sue them for it. Obviously, you can license the rights to your intellectual property, or you can even sell it.

Your control over your intellectual property does have a major limitation, however. Once you sell a particular instance of your work, it is not yours. If you authorize a reproduction of your painting, for example, and sell it to a friend, you no longer have control over that copy of the painting. While the creation of ever more copies based on that copy would be illegal without your permission, your friend has every right to turn around and resell the copy that you sold him, unless you have a contractual agreement with him that states otherwise. This rule, that you have no control over the work once you have sold a particular instance of it, is known to lawyers as the first sale doctrine.

While the first sale doctrine is conceptually very simple, and there are only very rarely lawsuits relating to it, the computer industry thought it found a way around it when it created the End User License Agreement (the infamous EULA). One of the tricks software makers introduced was asserting in the End User License Agreement that the software has been licensed to the user, but not sold, meaning that the user cannot turn around and resell the software to a friend. The courts have fairly consistently rejected this argument, because the end user only rarely actually agrees to the End User License Agreement.

The first sale doctrine originates in a 1908 case that dealt with a book publisher who felt that a book store's sale of his books at an extremely low price (less than the amount stated on the book's jacket) constituted copyright infringement. The court ruled that the publisher only had legal control over the "first sale" - the sale to be the book seller, and that if the publisher wanted to control the retail price, it would have to go into the book selling business itself.

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