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Criminal Resource Manual

1854. Copyright Infringement -- First Sale Doctrine

Few issues have created greater confusion in criminal copyright prosecutions than the "first sale doctrine." The doctrine is one of the specific statutory restrictions which Congress has placed on the exclusive rights of copyright owners. Criminal defendants frequently resist prosecution by claiming that they believed that the works they were selling had been the subject of a legitimate first sale. Moreover, several criminal copyright convictions have been overturned because of inadequacies in the government's proof on this issue. For this reason, a federal prosecutor should have a clear understanding of the first sale doctrine when considering whether to bring a criminal copyright case.

The first sale doctrine, codified at 17 U.S.C. § 109, provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner. The right to distribute ends, however, once the owner has sold that particular copy. See 17 U.S.C. § 109(a) & (c). Since the first sale doctrine never protects a defendant who makes unauthorized reproductions of a copyrighted work, the first sale doctrine cannot be a successful defense in cases that allege infringing reproduction.

Further, the privileges created by the first sale principle do not "extend to any person who has acquired possession of the copy or phonorecord from the copyright owner, by rental, lease, loan, or otherwise, without acquiring ownership of it." See 17 U.S.C. § 109(d). Most computer software is distributed through the use of licensing agreements. Under this distribution system, the copyright holder remains the "owner" of all distributed copies. For this reason, alleged infringers should not be able to establish that any copies of these works have been the subject of a first sale.

Although courts agree that the first sale principle applies to criminal prosecutions, they do not agree on the burden of proof. Several cases suggest that in criminal copyright prosecutions, the United States must prove that the copyrighted work was not the subject of a first sale. Other cases, however, hold that the issue of a first sale is an affirmative defense that must be raised by the defendant. NOTE: Please consult the Computer Crime and Intellectual Property Section's Intellectual Property Rights Prosecution Manual for a detailed discussion of the first sale doctrine and related case law.

[cited in Criminal Resource Manual 1847; Criminal Resource Manual 1849; USAM 9-71.001]