First-sale doctrine
The first-sale doctrine (also sometimes referred to as the "right of first sale" or the "first sale rule") is an American legal concept that limits the rights of an intellectual property owner to control resale of products embodying its intellectual property. The doctrine enables the distribution chain of copyrighted products, library lending, giving, video rentals and secondary markets for copyrighted works (for example, enabling individuals to sell their legally purchased books or CDs to others). In trademark law, this same doctrine enables reselling of trademarked products after the trademark holder puts the products on the market. In the case of patented products, the doctrine allows resale of patented products without any control from the patent holder. The first sale doctrine does not apply to patented processes, which are instead governed by the patent exhaustion doctrine.
This article is about the first-sale doctrine as applied to copyright. For the analogous doctrine applicable to patents, see Exhaustion doctrine.Exceptions[edit]
Record rentals[edit]
The Record Rental Amendment of 1984, codified in 17 USC §109(b) prohibits an owner of a phonorecord that embodies a sound recording or musical work from renting it to the public for direct or indirect commercial advantage. This exception was designed to prevent music stores from renting records and thereby facilitating home copying.
Section 109(b) is an exception to the first sale doctrine, but it is limited in several ways. It applies only to rentals, and not to resale or other transfers. It is also limited to a subset of sound recordings—only those sound recordings that contain only a musical work. It does not apply to sound recordings that contain other content, such as commentaries or dialog soundtrack, or to non-musical sound recordings, for example audiobooks. Lastly, libraries and educational institutions are exempt from this restriction, and may rent or loan musical sound recordings.
Software rentals[edit]
The Copyright Software Rental Amendments Act of 1990 amended §109(b) further to prohibit rentals of computer software for direct or indirect commercial advantage. The exception does not apply to lending of a copy by a nonprofit library for nonprofit purposes, provided the library affixes an appropriate warning. The amendment also specifically excluded: