Digital First Sale Debate in Nashville

On May 21st, 2014, the USPTO convened a roundtable event in Nashville, TN, to discuss statutory damages; the First Sale Doctrine in the digital environment; and the legal framework for the creation of remixes.

It was all very interesting, but I'll blog about one thing at a time.

First, to explain the "First Sale Doctrine". This doctrine recognizes that physical goods, such as paperback books or vinyl discs, are likely to deteriorate in condition each time they are enjoyed, thus becoming less valuable and less perfect. Something that is "used" is inferred to be inferior in quality and less valuable than an "unused" or "new" item.

"First Sale Doctrine" also relies on the concept that the first owner abandons his/her ownership of the physical item if they sell it, give it away, or for the duration of any time that they lend it to someone else.

First Sale Doctrine does not apply to digital content, because digital content cannot be transferred between persons without the creation of a new, unused and perfect copy (which is a right reserved only to the copyright owner); moreover, it is impossible to verify and be certain that the original "user" has indeed abandoned all backup copies that he/she is allowed to make for their own protection.

Advocates of the existing system of "licensing" digital content asseverate that a license is flexible, cost-effective, and allows the consumer many choices and great convenience since they may access the licensed digital content on their choice of devices wherever and whenever they wish.

(Opponents complain that this is not true, because various retailers try to lock their customers into a proprietary ecosystem. My view is that, just because distributors such as Apple or Amazon or Barnes and Noble have their own DRM and their own devices is not a reason to change the law that affects copyright owners.)

Those who argue in favor of applying First Sale Doctrine to digital content argue that Amazon, Apple, Barnes and Noble etc use the short word "BUY" on their buttons (rather than "LICENSE") so "Buy" should mean "Buy".... ownership.... first sale rights.  My view is that copyright owners do not control the wording used by retailers on their sites, and just because retailers prefer a three letter word to a seven letter word, copyright law should not be changed.

Both sides of the debate were represented on the panel. Both sides felt that their position would result in the cheapest and greatest availability and access to works.

Those who would like individuals to be able to enjoy the copyright-protected ability to create copies and publish and distribute them argued that all ebooks etc would come under downward presssure if there was a "used" market, and "used" e-books competed equally with "new" e-books.

They suggested that readers would be motivated to buy legal ebooks (instead of pirating them) if they "owned" the e-book and had the right to sell or lend or give away e-books they didn't enjoy, or that they had read and did not want to store.

Copyright advocates who ae not in favor of extending First Sale Doctrine to ebooks suggested that legal prices for e-books would have to increase if the copyright owners were selling not only the right to read the e-book, but also the right to make copies and split them up, and sell them in competition with "new" e-books in the open market.

Copyright advocates discussed the unacceptable implications for personal privacy if First Sale applied, and a seller had to demonstrate complete and utter abandonment of all copies. Every computer, flash drive, cloud account, email account, ebook reader and more would have to be examined to prove that a copy had not been retained. The technology does not currently exist, and if it did, consumers would dislike it.

Those who argue in favor of applying First Sale Doctrine to digital content argued that consumers of digital content do not read licensing agreements (and should not be expected to read or understand what they are agreeing, when they click "I agree").

Editorializing.... So, copyright protections should be weakened for hard working creators because a few Ivy League law professors believe that digital content users are stupid and lazy and impulsive?

According to the USPTO  hosts of the event, many e-book authors have written in expressing concerns about their livelihood if any ebook consumer could compete with the creator for sales.

It was well worth watching.
I hope to post about Statutory Penalties soon.

Happy Memorial Day.

All the best,
Rowena Cherry
SPACE SNARK™ http://www.spacesnark.com/