“First Sale” Copyright Doctrine: Potential Threat To Image Licensing

Posted on 4/5/2013 by Paul Melcher | Printable Version | Comments (3)

There is a battle brewing in courts that everyone in the photo industry should pay very close attention to. A company called ReDigi (https://www.redigi.com/) is in the business of allowing anyone to resell “used” digital files. In other words, allowing anyone to sell, for example, an MP3 file they legally purchased. They claim rightful business practice under the first sale doctrine, the same rule that allows you to resell your used books.

The first sale doctrine has been in place and used by everyone for a long time. From vinyls to CD’s, video tapes to DVD’s, books, everyone has, in their lifetime, sold copyrighted material they were done consuming. Wikipedia states “ The first-sale doctrine plays an important role in copyright and trademark law by limiting certain rights of a copyright or trademark owner. The doctrine enables the distribution chain of copyrighted products, library lending, gifting, 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 put the products on the market.”

Up to now it has always been in a physical format. ReDigi claims that there should be no difference for digital files of the same content.

US District Court Justice judge Richard J. Sullivan has recently ruled that Redigi was a “direct, contributory, vicarious infringement”. However, he added “ The Court cannot of its own accord condone the wholesale application of the first sale defense to the digital sphere”.

The difference between the physical and digital transfer is that in the physical world, the owner does not keep a copy of the work once the transaction is completed. In the digital world, obviously, the work is duplicated. However, the European Court of justice recently rules that it is permissible to resell software license and that the first sale doctrine applies when the software was sold to the original customer for an unlimited amount of time.

Without going further into obtuse legalese, it is clear that, once again, what affects musical files and software license will find its way to photography. Under the European ruling, Royalty Free images could become fair game for first sales doctrine, allowing buyers to resale images. In other words, photographs could find their way in huge second hand markets with the photographer, or the agency, never seeing a penny.

Think it’s no big deal? Amazon was awarded a patent for a digital file second hand marketplace and Apple is also in the process of seeking one for a similar usage. Both are getting ready to open the floodgate should the first sale doctrine become applicable to digital files. Will your images be part of it?

For more on this issue check out the New York Times article here and the Supreme Court decision here. For more of Paul Melcher's insights into the stock photo industry check out his blog at http://blog.melchersystem.com/

Copyright © 2013 Paul Melcher. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


  • Lynn Eskenazi Posted Apr 5, 2013
    If this is approved and able to happen it could totally destroy our industry doing more damage then microstock has!
    It goes against existing copyright law. This is horrifying!!

  • Larry Minden Posted Apr 5, 2013
    Would seem images licensed under tightly written RM licensing terms will be immune to this challenge!

  • Todd Klassy Posted Apr 5, 2013
    I would agree, Larry. A contract is still a contract.

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