exhaustion of rights afforded by the treaties will apply after the first sale or other transfer of
ownership of the original or a copy of a work with the authorization of the owner.^3318 The WIPO
treaties thus seem to contemplate that the interplay between the doctrine of first sale and the new
rights of transmission and access will ultimately be resolved through implementing legislation.
Although the implementing legislation in the United States afforded Congress the
opportunity to resolve the ambiguities in the scope of the first sale doctrine as applied to the
Internet, the DMCA does not address the issue. One of the proposed bills to implement the
WIPO treaties, H.R. 3048, would have added the following new subsection (f) to Section 109 of
the copyright statute with respect to applicability of the first sale doctrine to works in digital
format:
(f) The authorization for use set forth in subsection (a) applies where the owner
of a particular copy or phonorecord in a digital format lawfully made under this
title, or any person authorized by such owner, performs, displays or distributes the
work by means of transmission to a single recipient, if that person erases or
destroys his or her copy or phonorecord at substantially the same time. The
reproduction of the work, to the extent necessary for such performance, display,
distribution, is not an infringement.This provision seems to have been drafted to apply to the paradigm situation, discussed
above, in which the original sale of a work via transmission in digital format results in a
complete copy of the work residing in permanent storage at the purchaser’s site. So long as the
original purchaser erases his or her copy at substantially the same time, new subsection (f)
permits the purchaser to transmit that copy to a third party without liability (including any
reproductions, displays or performances that are attendant thereto).
The applicability of this provision to the case of on-demand transmissions for
simultaneous viewing or other usage by the original purchaser (such as movies or online games)
is not clear. In those instances, as discussed above, it is unclear whether the purchaser should be
treated as the “owner of a particular copy or phonorecord in a digital format” by virtue of the
initial on-demand download of the work in order to trigger application of the new subsection (f).
In any event, this provision was not adopted in the DMCA.
The European Copyright Directive appears to take the position that obtaining a copy of a
copyrighted work through an online service does not exhaust the copyright owner’s rights in a
way that would allow resale or retransmission of such copy. Specifically, paragraph 29 of the
recitals to the Directive states the following:
“The question of exhaustion does not arise in the case of services and on-line
services in particular. This also applies with regard to a material copy of a work
or other subject-matter made by a user of such a service with the consent of the
rightholder. Therefore, the same applies to rental and lending of the original and(^3318) See Article 6(2) of the WIPO Copyright Treaty and Articles 8(2) and 12(2) of the WIPO Performances and
Phonograms Treaty.