Digital Exhaustion

As digital networks emerge as the dominant means of distributing copyrighted works, the first sale doctrine is increasingly marginalized. The limitations first sale places on the exclusive right of distribution are of little importance when the alienation and use of copies entails their reproduction. This fact of the modern copyright marketplace has led to calls for statutory clarification of digital first sale rights. Acknowledging the obstacles to legislative intervention, this Article argues that courts are equipped today to limit copyright exclusivity in order to enable copy owners to make traditionally lawful uses of their copies, including resale through secondary markets. We argue that first sale is not simply an isolated limitation on the distribution right. Instead, it is a component of a broader principle of copyright exhaustion that emerges from early case law preceding the Supreme Court’s foundational decision in Bobbs-Merrill v. Strauss. This context reveals a common law of copyright exhaustion that embraces a set of user privileges that includes not only alienation, but renewal, repair, adaptation, and preservation. Despite congressional recognition of exhaustion in sections 19 and 117 of the Copyright Act, this Article concludes that courts have ample room to apply and continue to develop common law rules that preserve the many benefits of the first sale doctrine in the digital marketplace