or phonorecord, and ReDigi users were not reselling the particular copies of music files they had
purchased on iTunes – rather, they were producing new copies of the files on the ReDigi server.
Because it was impossible for a ReDigi user to sell his or her “particular” music file on ReDigi,
the first sale doctrine could not apply.^3322 “Put another way, the first sale defense is limited to
material items, like records, that the copyright owner put into the stream of commerce.”^3323
G. Pop-Up Advertising
- The Gator Litigations
In June of 2002, a number of publishing companies and other entities operating their own
web sites sued Gator Corporation for copyright infringement, trademark infringement, unfair
competition and other causes of action based on Gator’s causing unauthorized pop-up advertising
to appear on the sites of the plaintiffs. Gator widely distributed a software application called
“Gator” that acted as a digital wallet to provide users with a mechanism for storing personal
information about themselves, passwords, user identification numbers and names and other data
that consumers routinely need to input on electronic forms when shopping on the Internet. Gator
bundled with the digital wallet software another program called “OfferCompanion,” which, once
installed, would automatically launch whenever a user initiated a browser-based Internet
connection, observe the sites visited by the user, and whenever the user visited certain websites,
display one or more unauthorized pop-up advertisements directly over such websites, obscuring
a portion of the content of the website.^3324
Gator sold its pop-up advertising services to various clients, who in many instances
would engage the Gator service to cause the clients’ pop-up ads to appear when users visited
competitor’s sites. For example, a Gator pop-up advertisement for hotjobs.com would appear on
the home page of the plaintiff Dow Jones’ CareerJournal.com web site, a classified recruitment
advertising site that competed with hotjobs.com.^3325 The plaintiffs sought a preliminary
injunction against Gator on the grounds, among others, that the unauthorized display of Gator
ads on the plaintiffs’ sites infringed the plaintiffs’ exclusive right of distribution under copyright
law and constituted the making of unauthorized derivative works.
With respect to the distribution right, the plaintiffs argued that each of their web sites
were governed by a “terms and conditions of use” that granted site visitors a license to use and
display the copyrighted content of the site but not to alter the site or change its appearance.
Because Gator’s pop-up advertising altered the appearance of the plaintiffs’ web sites by
(^3322) Id. at 655-56.
(^3323) Id. at 655. The court also noted that, in its report on the DMCA, the U.S. Copyright Office rejected extension
of the first sale doctrine to the distribution of digital works, noting that the justification for the first sale doctrine
in the physical world could not be imported into the digital domain. U.S. Copyright Office, Library of
Congress, DMCA Section 104 Report (2001).
(^3324) Memorandum in Support of Plaintiffs’ Motion for Preliminary Injunction, Washingtonpost.Newsweek
Interactive Co. v. The Gator Corporation, Civil Action 02-909-A (E.D. Va. June 25, 2002), at 8-10 (copy on file
with the author).
(^3325) Id. at 10.