Originally Posted by DuckieHo
To add futher complexity.... what about eBooks?
I assume this and online music fall under software?
As more and more media becomes digitized and electronically distributed.... Is it safe to say that First Sale doctrine is going to apply to less and less.
I have read some commentary that makes some proposals regarding how one might go about ebooks, but as it stands, I'm fairly certain that they license them to you. The problem is that by transferring it to someone else, you'd be in essence copying the file. Since you are allowed to make a single backup of the file, you could do so onto a physical disk, dispose of the copy on your drive and then physically hand it off. It's a dicey area. For example, the courts always find that putting a copy of software into ram from your hard disk counts as making a copy because it allows for a readable, usable, copyable version to be made from it, and despite its short shelf life, they consider it fixed. This allowed people to bring suits against computer service technicians for infringement when they turned on and used computers for which they were not a licensed user of the software. Congress eventually enacted a law to stop that.
There are exceptions to circumvention, which the librarian of congress promulgates, but they have nothing to do with transferring your ownership of a copy.
First Sale will still apply to anything physical so it's not going anywhere. First Sale is really rooted in physical notions of property and policies against non-transferability. The thing to think about with IP is that it is separate from real or personal property (meaning land or everything else). It's only about 500 years old. IP is different because it suffers from the public goods problem http://en.wikipedia.org/wiki/Public_good
. That's why it gets special protection. The theory is that people will create more than they would have if you grant them protection.
First sale came about because someone put in the book that you could not sell it for under 1 dollar, and someone did after buying them from someone else. Basically the court said this did not bind the person. You own the physical item, you can transfer it. The difference here is that there is an actual contract involved.
The software providers are going to argue that it helps bring down prices and from a policy point of view we do not want courts interfering with contracts (actually these are licenses and not contracts since there is no exchange involved, licenses are freely revokable unless otherwise stated and usually software licenses say what will prompt a revocation).
People here are arguing that the court should step in and say you cannot prevent people from transferring their license when there is no formal agreement beyond a piece of paper in the shrink wrap. The 7th circuit upheld shrink wrap licenses here http://en.wikipedia.org/wiki/ProCD_v._Zeidenberg
Professor Nimmer argues that you should state that you are using a license to protect trade secrets in your software though he doesn't explain why (Nimmer on copyrights, I don't have a cite right now). My guess is because ProCD dealt with material which was not copyrightable and so you need an in like trade secret law (which I do not know) to keep the court from distinguishing based on something like that.
There are a couple of real life analogies I can think of. There are certain companies which will not provide you with service, unless you buy the equipment directly from them. I can imagine an alarm company doing this. They want to sell you the equipment and install it and not have you buy someone's cheaper. They would not have to enter into contract with you.
A different situation though arises with cable boxes. If you remember, cable companies had to provide access for cable boxes that were not from them via cablecard. My guess on this is because cable companies have a monopoly and so the government stepped in to regulate.
The fact of the matter is that it does suck and unless Congress wants to change the rules, these things are likely to be upheld. If people make it clear to companies that they will not purchase their software then they may change the rules on their own. It's doubtful though.