What Is the First Sale Doctrine In Copyright Law?

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Under the first sale doctrine of copyright law, someone who purchases a copyrighted work such as a book or a painting can later sell the physical item to someone else without obtaining the permission of the copyright holder. Once a consumer pays for a particular item in a lawful sale the purchaser has the right to freely distribute that good regardless of where it was manufactured.

However, luxury Swiss watch maker Omega are currently bringing an action against Costco. questioning whether the “first-sale doctrine” applies also to imported works manufactured abroad or only goods manufactured within the United States.

eBay, Amazon, Google, Target and other discount retailers have filed submissions in the case of  Costco Wholesale Corp. v. Omega, S.A., now before the US Supreme Court to support Costco's defence against copyright infringement for selling an Omega watch in it's store.

eBay has always been recognized globally as a place to find great deals on new, used and vintage items, and is concerned that the Supreme Court's ruling that the first-sale doctrine doesn't apply to imported goods manufactured abroad could have an adverse impact on the ability of buyers and sellers of secondary-market goods to engage in commerce in the United States.

eBay has filed an amicus brief along with Amazon, Google and discount retailers to protect the right of  customers to buy and sell a wide variety of goods manufactured domestically and abroad. eBay wants to ensure that buyers and sellers have the confidence that lawfully produced and purchased goods may be resold free from unknown and unknowable claims of copyright infringement.

Although arguments are currently being heard in the case, a decision is not expected to be handed down until mid 2011.

One of the disturbing implications of a finding that non-US goods not being subject to the first sale doctrine, is that the rights holders' ability to control distribution ma not end upon the first sale of copies in the United States. The relevant companies could effectively prevent any resale, rental or further distribution of copies from occurring, and foreign made copies would receive greater protection than US counterparts.

s109(a) of the Copyright Act codifies the first sale doctrine and applies to goods 'lawfully made under this title". Experts are dividing over whether this section means lawfully made under this title in the sense of being copies made overseas with the approval of U.S. copyright owners. Others argue that s109(a) does not afford protection to Costco as it does not state that the first sale doctrine applies to "goods lawfully made or imported" under this title and to apply s109(a) overseas would have the effect of exporting US law extraterritorially.

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