Applying Copyright Theory to Secondary Markets: An Analysis of the Future of 17 USC § 109(a) Pursuant to Costco Wholesale Corp. v. Omega S.A.

Mark Jansen, Santa Clara University School of Law

Abstract

The U.S. Copyright Act grants copyright owners the exclusive right to distribute their copyrighted works. The first sale doctrine, codified in § 109(a) of the Copyright Act, curtails these distribution rights by exhausting the owner’s exclusive right after the copyrighted item is placed in the stream of commerce. However, it is not clear whether the language used in the Act, “copies made under this title,” is inclusive of copies manufactured aboard or limited to copies manufactured in the United States. Section 109(a) recently came up for interpretation by the Supreme Court in Costco Wholesale Corp. v. Omega S.A.; yet, the Court’s holding did little to clarify the ambiguity surrounding the application of the first sale doctrine. The Court’s failure to resolve the issue has the potential to cause significant harm to the U.S. economy and eliminate the rights of consumers and small business.

This Article suggests that the solution is to incentivize Congress to amend § 109(a) and bring it into conformity with the true aims of copyright law, to promote knowledge via creation and distribution. In doing so, Congress should redraft this portion of the Act broadly to accommodate the domestic sale of copyrighted goods lawfully manufactured and sold abroad. Expanding the first sale doctrine in this manner will yield new discoveries and will stimulate learning, in accordance with the aims of copyright law.