First-Sale Doctrine

[lowenstat]

The first-sale doctrine is a limitation on copyright that was recognized by the U.S. Supreme Court in 1908 and subsequently codified in the Copyright Act of 1976, 17 U.S.C. § 109. The doctrine allows the purchaser to transfer (i.e., sell or give away) a particular lawfully made copy of the copyrighted work without permission once it has been obtained. That means that a copyright holder's rights to control the change of ownership of a particular copy end once that copy is sold, as long as no additional copies are made. This doctrine is also referred to as the "first sale rule" or "exhaustion rule".

With reference to trade in tangible merchandise, such as the retailing of goods bearing a trademark, the "first sale" rule serves to immunize a reseller from infringement liability. Such protection to the reseller extends to the point where said goods have not been altered so as to be materially different from those originating from the trademark owner.

materially "to an important degree; considerably"

How does materially get interpretated by the courts? Some examples would be better to explain for me.

These examples assume: (1) following proper advertising laws (2) strictly US retail in purhases with no wholesale contracts (3) no authorization from TM owner to resell and no delership agreements -

In fact, through in (4) a C&D to stop using their TM and brand name:

In general without knowing all the facts not in evidence or analyzed or course:

How about, taking a GPS sytem and adding more memory to it? Can that be resold if purchased without contract under the first sale doctrine.

How about reselling a bag of planter bark but then mixed with sand and reselling it?

How about a PC and then swapping the hard drive for a larger sized one and reselling it?

How about a voice recorder opened up and altered to record to an external memory stick or mini hard drive instead of the internal memory and sold as a kit?

How about reselling a kit that has memory sticks (not owned by TM owner of item in question) and other simple wires/tool with instructions (written and owned by reseller) to modify some product that has a warranty void sticker across the side of it? The product is not included but of course is named in the ad - even though C&D says not to?

Questions as to what importance or meaning of this law has. Why cant we resell anything we want? If we can, then why does this law say it has to not be considerably altered?

Certainly we should be able to alter anything into something considerably/materially different and sell it? Why not? Is this because its going to get the consumer confused about the product and potentially harm the TM owner in some fashion?

Was this law created to allow free trade and keep the TM owner from imposing harsh restrictions on the future onwers of the TM owners created products once sold.

 

[divgradcurl]

Questions as to what importance or meaning of this law has. Why cant we resell anything we want? If we can, then why does this law say it has to not be considerably altered?

You can sell anything you want -- you just can't use someone else's trademark to advertise it if it has been altered.

This has been explained in other threads -- a trademark exists to identify the source or manufacturer of a product or service, so that consumers can make a purchase based on the reputation of the product or service.

When you alter a trademarked product and then sell it, the consumer can no longer rely on the trademark holder's reputation, since the goods have been changed. That reduces the value of the trademark, and the trademark holder has the right to go after someone who is damaging the value of their mark.

Certainly we should be able to alter anything into something considerably/materially different and sell it? Why not? Is this because its going to get the consumer confused about the product and potentially harm the TM owner in some fashion?

See above.

Was this law created to allow free trade and keep the TM owner from imposing harsh restrictions on the future onwers of the TM owners created products once sold.

Trademark laws exist for two reasons -- one, to help consumers identify products and services that they want to use, and two, by making trademark an enforceable property right, incentivize companies to establish, market and protect trademarks.

Think about it, would you buy a can of Coke if you didn't actually know what was in the can? The reason people buy Coke is because they know what to expect when they open the can.

 

[lowenstat]

Thanks again. I appreciate it.

The reason I presented the case as one where the advertising is proper/legal/no-infringing is to remove it from the equation. This was for a reason.

I'm trying to break it up into peices to learn how it works.

I can always change the advertising right? So that is not a problem for me. That is a variable I can deal with - unless you saying that I cant even use their descriptive name if they simply don't want me to?

It sure seems to me I can mody products all day long and resell them regardless of who owns them or mostly whatever they are, especially since its a memory upgrade. I just have to advertise properly. Does this sentence make you cringe lol?

As far as coke example, the change to the 'coke' was explained in clear detail in thd ad. I would have to think that doing so would make the mod and resell legal - or non-infringing.

 

[divgradcurl]

The reason I presented the case as one where the advertising is proper/legal/no-infringing is to remove it from the equation. This was for a reason.

Then you are missing the point. There are a lot of things that are legal to do if you take out a single element. A might be legal, B might be legal, but that doesn't mean A+B is legal.

I can always change the advertising right? So that is not a problem for me. That is a variable I can deal with - unless you saying that I cant even use their descriptive name if they simply don't want me to?

I am not saying anything. Use of a trademark in a "purely descriptive" sense is a "Fair use" of a trademark. But two things -- first, "fair use" is a DEFENSE to a trademark action, so it doesn't keep you from being sued, it's just a factor that cuts against a finding of liability for infringement. Second, it's only a fair use when you are describing the particular product -- in your case, that may not be the case. You are not describing an IBM PC, you are using the trademark to sell an IBM PC with modification -- that may not be a "purely descriptive" use, and it may not be a fair use -- it may be an infringing use.

Certainly the trademark holder does not appear to think this is a fair use.

It sure seems to me I can mody products all day long and resell them regardless of who owns them or mostly whatever they are, especially since its a memory upgrade. I just have to advertise properly. Does this sentence make you cringe lol?

No. I don't have a dog in this fight, as they say. What I do see is that you are taking general rules, and applying them to your situation while ignoring important factors and nuances.

As far as coke example, the change to the 'coke' was explained in clear detail in thd ad. I would have to think that doing so would make the mod and resell legal - or non-infringing.

That's not how trademark law works. The key test in trademark law is "likelihood of confusion." That is, would a customer, upon reviewing (in this case) your ad, be "confused" about the manufacturer of the product. The problem here is, "confusion" is tested on first glance -- if someone looks at your ad and sees "IBM PC with big HDD" and believes the ad to be for an IBM PC as sold by IBM or warranted by IBM or approved by IBM or endorsed by IBM --- I think you get my point -- without looking at the "small print" (even if said print is not small), then this is confusion.

Courts have found that embedding metadata into a website (so that your page appears in a search for IBM PC's) is sufficient (in some cases) to find "confusion" even if it is absolutely clear once the page loads that you are not selling IBM PC's -- and that's because the confusion has already occurred.

Like I have said, you really need an objective opinion on this.