On June 1, 1908, 100 years ago today, the US Supreme Court decided Bobbs-Merrill v. Straus, a case that established what would become known as the “first sale doctrine”. This doctrine, now codified as part of the US Copyright Act, says that in general the owners of books or other copyrighted works have the right to dispose of them as they see fit (such as by reselling them, giving them away, or lending them out). The copyright holder can still control the right to make copies, make public performances, or other derivative works. But once a reader has bought a book, they can pass it along as they see fit. (Or keep it, or fold it into little origami shapes for their own amusement. They own it, after all.)
This right exists even in the presence of notices to the buyer that claim to conditionally license the work, rather than sell it. Indeed, those kinds of licenses, familiar now to most computer users, were also at issue in the Bobbs-Merrill case. (For historical background, including some examples of old-time “end user license agreements”, see a post of mine from a few months ago, “The right to read, circa 1906.”)
Despite attempts by many software, music, and ebook publishers to extend control over their products to their buyers, the first sale doctrine is still salient today. Just last month, for example, a federal judge cited the first sale doctrine to uphold the right of an eBay merchant to resell used software. An article in Ars Technica has a link to the decision, and an excellent explanation of the case and the importance of the principles it upholds. Ultimately, as the article points out, the first sale doctrine is what “makes libraries and used book stores possible” without needing the permission of publishers to exist or carry out their missions.
The free access to literature that libraries provide, and the freedom to provide access to literature that the first sale doctrine provides, promote the literacy and education of all our citizens. So this is an anniversary well worth remembering for its contribution to society. Happy First Sale Day!
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Everybody's Libraries 
Great article! I shared your message with my readers, and linked them here. Hope you don’t mind.
I’m curious does this also allow rentals?
Does blockbuster pay royalities on the movies it rents out?
Autumn: Feel free! Blog posts are meant to be linked to and commented on.
CD Falco: Section 109 of the Copyright Act, which I link to in the post, does place some restrictions on certain kinds of rentals, in particular software and recorded music. That’s one reason you don’t see music rental places along with video rental places.
My non-lawyer understanding is that Blockbuster wouldn’t have to pay royalties on the rents of any movies that buy in ordinary retail transactions. But some video chains may make special contracts with the studios in which they get free or reduced-price disks or tapes in exchange for agreeing to pay the studios a cut of the rental fee. This 2001 First Monday article says that was how Blockbuster’s “guaranteed in-stock” program worked. I don’t offhand know how common this arrangement is in Blockbuster and similar chains today.
As of this date (9/15/08) BBC Audio is making rather threatening noises to public libraries regarding the purchase and use of BBC “trade” editions in libraries instead of their (much more expensive) “library” editions. They claim that they sell an “unlimited circulation license” of audio books to libraries (as a form of software), and a “personal use license” to consumers, and that sale of the consumer version to libraries for multiple uses is illegal, and violates the Lanham Act. Supposedly, the publisher must pay “library edition rights” to authors’ agents in order to sell to libraries. As a buyer of audiobooks for libraries, I’ve never heard of this (and never seen a license on an audiobook) but it appears to be an attempt to go around the intent of the First Sale Doctrine.
I run a used textbooks exchange site and at first I felt iffy about it – but I figured if the universities and bookstores are buying them back and reselling them, then I see nothing wrong with it. I’m glad I came across your post that explains the First Sale Doctrine – thanks!