Class 11 Copyright, Spring, 2008 Distribution and First-Sale Doctrine Randal C. Picker Leffmann...
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Transcript of Class 11 Copyright, Spring, 2008 Distribution and First-Sale Doctrine Randal C. Picker Leffmann...
Class 11Copyright, Spring, 2008
Distribution and First-Sale Doctrine
Randal C. PickerLeffmann Professor of Commercial Law
The Law School
The University of Chicago
773.702.0864/[email protected] © 2005-08 Randal C. Picker. All Rights Reserved.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 2
106. Exclusive rights in copyrighted works
Subject to sections 107 through 121, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: … (3) to distribute copies or phonorecords of
the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
April 21, 2023 Copyright © 2005-07 Randal C. Picker 3
The First-Sale Doctrine
109(a) Notwithstanding the provisions of section
106(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.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 4
Bobbs-Merrill v. Straus
210 U.S. 339 (1908)
April 21, 2023 Copyright © 2005-07 Randal C. Picker 5
1870 Copyright Act: 2nd General Revision
That any citizen of the United States, or resident therein, who shall be the author, inventor, designer, or proprietor of any book, map, chart, dramatic or musical composition, engraving, cut, print, or photographs or negative thereof, or of a painting, drawing, chromo, statue, statuary, and of models or designs intended to be perfected as works of the fine arts, and his executors, administrators, or assigns,
April 21, 2023 Copyright © 2005-07 Randal C. Picker 6
1870 Copyright Act
shall, upon complying with the provisions of this act, have the sole liberty of printing, reprinting, publishing, completing, copying, executing, finishing, and vending the same; and in the case of a dramatic composition, of publicly performing or representing it, or causing it to be performed or represented by others; and authors may reserve the right to dramatize or to translate their own works.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 7
The Cassilis Engagement (1907)
April 21, 2023 Copyright © 2005-07 Randal C. Picker 8
The Cassilis Engagement (1907)
April 21, 2023 Copyright © 2005-07 Randal C. Picker 9
More Rights Reservation
April 21, 2023 Copyright © 2005-07 Randal C. Picker 10
Bobbs-Merrill v. Straus
Selling The Castaway by Hallie Ermine Rives
April 21, 2023 Copyright © 2005-08 Randal C. Picker 11
The Castaway
April 21, 2023 Copyright © 2005-08 Randal C. Picker 12
Copyright Page
April 21, 2023 Copyright © 2005-07 Randal C. Picker 13
Selling the Book
Core Facts Bobbs-Merrill sells The Castaway with the
reservations notice beneath the copyright statement in each copy of the book
Macy’s is selling the book for 89 cents Macy’s bought the book from wholesalers;
everyone knew of the notice; no contracts regarding sales price
April 21, 2023 Copyright © 2005-07 Randal C. Picker 14
Reading Sec. 4592 From the Opinion
“Sec. 4952. Any citizen of the United States or resident therein, who shall be the author, inventor, designer, or proprietor of any book, map, chart, dramatic or musical composition, engraving, cut, print, or photograph or negative thereof, or of a painting, drawing, chromo, statute, statuary, and of models or designs intended to be perfected as works of the fine arts, and the executors, administrators, or assigns of any such person, shall, upon complying with the provisions of this chapter, have the sole liberty of printing, reprinting, publishing, completing, copying, executing, finishing, and vending the same.” U.S. Comp. Stat. 1901, p. 3406.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 15
Meaning?
Says the Court “In our view the copyright statutes, while
protecting the owner of the copyright in his right to multiply and sell his production, do not create the right to impose, by notice, such as is disclosed in this case, a limitation at which the book shall be sold at retail by future purchasers, with whom there is no privity of contract.”
April 21, 2023 Copyright © 2005-07 Randal C. Picker 16
Meaning?
Says the Court “To add to the right of exclusive sale the authority
to control all future retail sales, by a notice that such sales must be made at a fixed sum, would give a right not included in the terms of the statute, and, in our view, extend its operation, by construction, beyond its meaning, when interpreted with a view to ascertaining the legislative intent in its enactment.”
April 21, 2023 Copyright © 2005-07 Randal C. Picker 17
[Amazon: The Castaway]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 18
Sec. 41: 1909 Copyright Act
“That the copyright is distinct from the property in the material object copyrighted, and the sale or conveyance, by gift or otherwise, of the material object shall not of itself constitute a transfer of the copyright, nor shall the assignment of the copyright constitute a transfer of the title to the material object; but nothing in this title 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.”
April 21, 2023 Copyright © 2005-07 Randal C. Picker 19
Organizing Secondary Markets
Three Situations Sequential ownership (used books) One owner, many users (rental markets) One owner, many users (libraries)
April 21, 2023 Copyright © 2005-07 Randal C. Picker 20
[SC: Amazon: GT&L]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 21
[SC: Used Prices]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 22
[SC: Author’s Guild]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 23
Music Rental
Hypo/History I buy music CDs Customers rent those from me; I sell blank
cassettes Where do I stand under 109(a)? 109(b)?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 24
Types of Works
102(a) Works of authorship include the following
categories: (2) musical works, including any
accompanying words; … (7) sound recordings
April 21, 2023 Copyright © 2005-07 Randal C. Picker 25
Musical Works? Undefined (H.R. 94-1476)
Of the seven items listed, four are defined in section 101. The three undefined categories—“musical works,” “dramatic works,” and “pantomimes and choreographic works”—have fairly settled meanings. There is no need, for example, to specify the copyrightability of electronic or concrete music in the statute since the form of a work would no longer be of any importance, nor is it necessary to specify that “choreographic works” do not include social dance steps and simple routines.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 26
101: Sound recording
“Sound recordings” are works that result from the fixation of a series
of musical, spoken, or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other phonorecords, in which they are embodied.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 27
101: Phonorecords “Phonorecords” are
material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term “phonorecords” includes the material object in which the sounds are first fixed.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 28
Controlling Sound Recording and Software Rental
109(b)(1)(A) Notwithstanding the provisions of
subsection (a), unless authorized by the owners of copyright in the sound recording or the owner of copyright in a computer program (including any tape, disk, or other medium embodying such program), and in the case of a sound recording in the musical works embodied therein,
April 21, 2023 Copyright © 2005-07 Randal C. Picker 29
Controlling … neither the owner of a particular phonorecord nor
any person in possession of a particular copy of a computer program (including any tape, disk, or other medium embodying such program), may, for the purposes of direct or indirect commercial advantage, dispose of, or authorize the disposal of, the possession of that phonorecord or computer program (including any tape, disk, or other medium embodying such program) by rental, lease, or lending, or by any other act or practice in the nature of rental, lease, or lending.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 30
Controlling …
Nothing in the preceding sentence shall apply to the rental, lease, or lending of a phonorecord for nonprofit purposes by a nonprofit library or nonprofit educational institution.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 31
[BA Audiobook Home]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 32
[Personal Use Edition]
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[Library Edition]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 34
[LE: Free Fixes]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 35
[LE: Discounts]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 36
[HCC Home]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 37
[HCC Library Downloads]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 38
Getting to the Case I
Hypo BA sells two editions of music CDs:
personal edition and library edition at higher price
Copyright issues? Why?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 39
Answer
April 21, 2023 Copyright © 2005-07 Randal C. Picker 40
Getting to the Case II
Hypo BA sells two editions of music CDs:
personal edition and library edition at higher price
HCC buys personal editions and attempts to resell them to libraries
Copyright issues?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 41
Answer
April 21, 2023 Copyright © 2005-07 Randal C. Picker 42
Getting to the Case III
Hypo BA sells two editions of music CDs:
personal edition and library edition at higher price
HCC buys personal editions and attempts to rent them to libraries
Copyright issues?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 43
Answer
April 21, 2023 Copyright © 2005-07 Randal C. Picker 44
Getting to the Case IV
Hypo BA sells two editions of audio books:
personal edition and library edition at higher price
HCC buys personal editions and attempts to rent them to libraries
Copyright issues?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 45
Answer
April 21, 2023 Copyright © 2005-07 Randal C. Picker 46
Organizing Domestic and Foreign Markets
Two Examples DVDs: Technological Separation Quality King: Legal Separation
April 21, 2023 Copyright © 2005-07 Randal C. Picker 47
[SC: Amazon Incred US]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 48
[SC: Amazon Incred UK]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 49
Comparing Prices
Same DVD US: $17.99 UK: £14.99
Exchange Rate (as of April 21, 2005): $1 = £0.510915, $1.91969 = £1
Matching Prices $17.99 = £9.37 £14.99 = $28.77
April 21, 2023 Copyright © 2005-07 Randal C. Picker 50
[SC: US Encoding]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 51
[SC: UK Encoding]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 52
[SC: Amazon on Encoding]
April 21, 2023 Copyright © 2005-07 Randal C. Picker 53
601. Manufacture, importation, and public distribution of
certain copies (a)
Prior to July 1, 1986, and except as provided by subsection (b), the importation into or public distribution in the United States of copies of a work consisting preponderantly of nondramatic literary material that is in the English language and is protected under this title is prohibited unless the portions consisting of such material have been manufactured in the United States or Canada.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 54
602. Infringing importation of copies or phonorecords
(a) Importation into the United States, without
the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 55
501. Infringement of copyright
(a) Anyone who violates any of the exclusive
rights of the copyright owner as provided by sections 106 through 121 or of the author as provided in section 106A(a), or who imports copies or phonorecords into the United States in violation of section 602, is an infringer of the copyright or right of the author, as the case may be.
April 21, 2023 Copyright © 2005-07 Randal C. Picker 56
Quality King
Core Facts L’anza makes shampoo; labels are
copyrighted works L’anza sells at higher prices in the US than
in foreign markets Quality King acts as middleman to bring
shampoo back to US
April 21, 2023 Copyright © 2005-07 Randal C. Picker 57
Quality King
Ninth Circuit rules for L’anza, saying that applying 109 first-sale defense would gut 602
April 21, 2023 Copyright © 2005-07 Randal C. Picker 58
Making, Selling, Importing
Hypo I print a copyrighted book in the US I sell copies in the US for $50 I export copies to the UK and sell them
there myself for $25 Importer buys in the UK for $25, takes the
book to the US and sells for $35 How does Sec. 602 apply to this situation?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 59
Quality King Result
This is the “round trip” case Books started in US, left and returned Under Quality King, 109(a) first-sale rights
“attach” Attach based on location of printing in US
—“lawfully made under this title” That is independent of where the particular
copy of the book is sold (see fn. 14 on p. 661)
April 21, 2023 Copyright © 2005-07 Randal C. Picker 60
Making, Selling, Importing
Hypo I print a copyrighted book in the US and sell
copies in the US for $50 I print copies in the UK and sell them there
for $25 Importer buys in the UK for $25, takes the
book to the US and sells for $35 How does Sec. 602 apply to this situation?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 61
Analysis
This is the one-way case 109(a) doesn’t attach, seemingly, to the
books printed in the UK 602(a) should apply and should block
imports Does this make it possible to enforce price
discrimination in this case?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 62
Analysis
Only way to enforce the across-country price discrimination is by moving the printing overseas
Contrary to US interests?; compare Sec. 601
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602(a) Rewrite
(a) Importation into the United States, without
the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is actionable under section 501.
How would Quality King come out?
April 21, 2023 Copyright © 2005-07 Randal C. Picker 64
Analysis
109 and First-Sale Doctrine Irrelevant under Rewrite
Overinclusive? Would cover US tourist buying book
covered by 602(a) in England to read on plane home
April 21, 2023 Copyright © 2005-07 Randal C. Picker 65
But See 602(a)(2)
This subsection does not apply to‑ (2) importation, for the private use of the
importer and not for distribution, by any person with respect to no more than one
copy or phonorecord of any one work at any one time, or
by any person arriving from outside the United States with respect to copies or phonorecords forming part of such person’s personal baggage
April 21, 2023 Copyright © 2005-07 Randal C. Picker 66
Legislative History From the Congressional Report
Section 602(a) first states the general rule that unauthorized importation is an infringement merely if the copies or phonorecords “have been acquired outside the United States,” but then enumerates three specific exceptions … If none of the three exemptions applies, any unauthorized importer of copies or phonorecords acquired abroad, could be sued for damages and enjoined from making use of them, even before any public distribution in this country has taken place.