2. DEFINITION
Doctrine of First sale
a legal principle allowing the purchaser of a
lawfully made copy of a copyright-protected
work to sell or give away that copy without
permission but not to reproduce it.
When a buyer legitimately purchases a product
protected by copyright (a book, for example) the
First Sale Doctrine grants that buyer a set of
rights regarding control and use of the
purchased product. The buyer has the authority
to sell, lend, or give away the legitimately
purchased product.
3. Under the First Sale Doctrine, a buyer does not acquire the
copyright associated with the work, however, the buyer
does acquire a range of ownership rights as to the single
copy of the work which was purchased. This grant of
rights of use and control to the buyer is an important aspect
of copyright law.
4. The first-sale doctrine creates a basic exception to the copyright holder's
distribution right. Once the work is lawfully sold or even transferred
gratuitously, the copyright owner's interest in the material object in which the
copyrighted work is embodied is exhausted. The owner of the material object
can then dispose of it as he sees fit. Thus, one who buys a copy of a book is
entitled to resell it, rent it, give it away, or destroy it. However, the owner of the
copy of the book will not be able to make new copies of the book because the
first-sale doctrine does not limit copyright owner's reproduction right. The
rationale of the doctrine is to prevent the copyright owner from restraining the
free alienability of goods. Without the doctrine, a possessor of a copy of a
copyrighted work would have to negotiate with the copyright owner every time
he wished to dispose of his copy. After the initial transfer of ownership of a
legal copy of a copyrighted work, the first-sale doctrine exhausts copyright
holder's right to control how ownership of that copy can be disposed of. For this
reason, this doctrine is also referred to as "exhaustion rule."
5. SEC 109 U.S.C THE FIRST SALE/EXHAUSTION
DOCTRINE
Limitations on exclusive rights
Notwithstanding the provisions of sec106(3)
the owner of a particular copy or phonorecord
lawfully made under this title or any person
authorized by such owner, is entitled without the
authority of the copyright owner, to sell or
otherwise dispose of the possession of that
copy or phonorecord.
Sec109(a) is a limitation only on the distribution
and display rights; it is not a limitation on the
rights to reproduce copies.
6. THE DISTRIBUTION RIGHT:
SEC. 106(3) OF THE COPYRIGHT ACT
Section 106 of the Copyright Act:
Exclusive rights in copyrighted works
Subject to sections 107 through 122, the owner of
copyright under this title has the exclusive rights to
do and to authorize any of the following: …
(3) to distribute copies … of the copyrighted
work to the public by sale or other transfer of
ownership, or by rental, lease, or lending;….
7. ORIGIN OF DOCTRINE
The doctrine was first recognized by the Supreme Court of
the United States in 1908 (see Bobbs-Merrill Co. v. Straus)
and subsequently codified in the Copyright Act of 1976, 17
U.S.C. § 109. In the Bobbs-Merrill case, the publisher,
Bobbs-Merrill, had inserted a notice in its books that any
retail sale at a price under $1.00 would constitute an
infringement of its copyright. The defendants, who owned
Macy's department store, disregarded the notice and sold
the books at a lower price without Bobbs-Merrill's consent.
The Supreme Court held that the exclusive statutory right
to "vend" applied only to the first sale of the copyrighted
work.
8. BOBBS MERILL CO. V. STRAUSS 210 U.S.339
(1908)
Justice Day Delivered the opinion of the court
Court held that the right to vend those copies was granted and that the right
was exhausted once the first sale was made.
The purchaser of a book once sold by authority of the owner of the copyright
may sell it again, although he could not publish a new edition of it.
The defendants were not in privity with plaintiff and cannot be subject to
contractual obligations
Reflects a policy judgement that Copyright owner’s did not extend beyond a
need to prohibit unauthorized reproductions.
The following year Congress codified Bobbs-Merill in Sec 27 of 1909 Act:
“Nothing in this Act shall be deemed to forbid ,prevent, or restrict the transfer of any
copy of a copyrighted work the possession of which has been lawfully obtained.”
9. US STAND
In the case, Kirtsaeng v. Wiley & Sons, the
United States Supreme Court is considering
a significant potential limitation to the First
Sale Doctrine. At issue in this case is the
applicability of the First Sale Doctrine to
educational textbooks printed outside of the
U.S. and sold in the U.S. The Court has
been asked to limit application of the First
Sale Doctrine only to copyright protected
material created in the United States.
10. The US Supreme Court held that Kirtsaeng was
protected by the first sale doctrine. Writing for the
court, Justice Stephen Breyer stated that that Section
109’s first sale doctrine was not limited by geography.
So long as a copy was lawfully made with the
consent of the US copyright owner, the first sale
doctrine applies – no matter where in the world the
copy was made.
This ruling will make it much harder for US music,
movie and software companies to stop copies
intended for foreign sales from being resold into the
US and undercutting domestic sales.
11. INDIAN COPYRIGHT ACT,1957
Sec 14 meaning of copyright
Explanation- For the purposes of this section a copy
which has been sold once shall be deemed to be a
copy already in circulation.
Section 51 deals with infringement of copyright. It is
a basic provision. It says : " Copyright in a work shall
be deemed to be Infringing when any person, without
a license granted by the owner of the Copyright or the
Registrar at Copyrights under this Act or in
contravention of the conditions of a license so
granted or of any condition imposed by a competent
authority under this Act.....
12. INDIA STAND
John Wiley & Sons & Ors. v. Prabhat Chander Kumar Jain & Ors. CS (OS)
No.1960/2008
In this particular case the Delhi High Court held that the first sale doctrine was
applicable only qua the exclusive licensees and not the owners who will continue
to have a cuase of action against the Defendants!!!! (para 100) It is
inconsequential as to whether a copy of the work has been sold by the licensee
or the owner. The only criterion is whether the copy of the work has been
legitimately sold i.e. as long as the licensee is duly authorized by the owner,
the sale is valid and the doctrine of first sale will kick in. The judgment further
states “The purchaser after purchasing from the exclusive licensee cannot
by claiming the principle of exhaustion or extinguishment of rights defeat
the rights of the owner. This is the only harmonious interpretation possible
by invocation of doctrine of first sales in the present case.” This is a prima
facie wrong conclusion and is not substantiated by any cogent reasoning,
especially since the judgment very conveniently avoids an in depth analysis of
Section 14 which expressly provides for such a right.
.
13. The Judgment instead pointlessly meanders around
discussing the principle of international exhaustion
and regional exhaustion as understood in various
Indian, American and English precedents. A
discussion on international and regional
exhaustion is wholly and completely irrelevant for
the purposes of this case. International and
regional exhaustion are relevant only in a factual
scenario where the goods are being imported into
the country and not exported. If anything, this is a
subject for an American Court dealing with the import
of these copies into the U.S.A
14. PENGUIN BOOKS LTD. VS INDIA BOOK
DISTRIBUTORS AND ORS. ON 1 AUGUST, 1984
Finally, the judge does note that “It is true that India
Distributors are not printing these books and are not
guilty of what is called primary infringement” but goes
on to state however, that “when they issue copies of
these titles for public distribution they are guilty of
secondary infringement”.
The plaintiffs are ordered to furnish within one month
a bank guarantee in the sum of Rs. one lakh as a
cross-undertaking in damages for the loss which the
defendants may sustain in case the plaintiffs fail in
the suit.
15. The facts in this case are identical to the case above.
Since the defendants did not put in an appearance in this
case there was no discussion on the doctrine of first sale
and exhaustion. The Court instead just analysed all of the
evidence that was put forward by the Plaintiff during the
trial and came to a conclusion that the Defendants were
violating the copyright of the Plaintiffs. The Court
therefore granted the reliefs prayed for by the Plaintiffs
along with Rs. 3,50,000 towards damages. This
judgment was delivered by Justice Bhat, last year,which is
an excellent judgment in the case of Warner Bros. v.
Santosh wherein he extensively discussed the doctrine of
first sale, exhaustion of rights etc. In fact this judgment
was discussed extensively by Justice Manmohan Singh in
his judgment.
16. AMENDMENT (INDIA)
1994
the Penguin judgment was sought to be overturned by an
amendment to section 14 in 1994. That amendment removed the
right to “publish”, and instead made it a right to “to issue copies of
the work to the public not being copies already in circulation”. It
stands to reason that this not only ensures the centrality of
the doctrine of first sale in India, but also allows for
international exhaustion, thus allowing for parallel import.
This is clear from the fact that we, in Indian law (as per section
40), makes it clear that “all or any provisions of this Act shall
apply to work first published in any class territory outside
India to which the order (under section 40) relates in like
manner as if they were first published within India
17. Thus, even books published internationally are, under the
legal fiction under section 40, akin to books published in
India. Since we are granting foreign works all the
protection under the Act as though they had been
published in India by Indian authors, it is but natural that
they should be subject to all the same limitations as well
(such as the doctrine of first sale).
As one commentator puts it, “with amendments, the
decision of the Penguin case is no more the law. Like
most other nations, we have also accepted the principle
of international exhaustion. This seems to be after taking
into view the public interest angle.”
Unfortunately, legal commentators seemed to have paid
greater attention to legislative changes than did the
courts.
