APAR's WORKING WEEKEND: No News Not Good News for Retailers31 Aug, 2001 By: Bruce Apar
The news this past week out of Washington, D.C., from the U.S. Copyright Office that digital downloads (of movies, for example) are not necessarily covered by the First Sale Doctrine — which protects a retailer from a vendor’s undue interference in the merchant’s transactions with customers — was not really news at all for those who’ve been paying attention.
It didn’t just happen yesterday that, as a distributor of copyrightable content, the Internet exhibits fundamental and functional differences from the storefront "space" of physically distributed goods. This World Wide Web of a delivery mechanism cannot in every instance be held to the same precise rules as brick-and-mortar commerce simply because it is not the same. If nothing else, Napster should have convinced everyone of that naked truth.
Before that music file-sharing service bopped onto the scene, it’s safe to say there were not millions of consumers routinely shoplifting their favorite songs and CDs from record stores. That’s a high-risk proposition requiring a seasoned sense of subterfuge. Napster was a no-risk proposition requiring nothing more than the foremost commodity of the still-new millennium — Internet access.
The Internet is a self-contained supply chain of content. Put more squarely into digital-domain terms, it is the content chain and the customer channel rolled into one. Content can be produced, distributed, transacted and consumed in the singular, ethereal space of a display device.
It is all too easy to get hold of a copyrightable work in cyberspace without paying for it to have a 20th Century, analog construct like First Sale apply absolutely to a 21st century, digital realm like digital content.
As the Copyright Office report says, "…ease of distribution and the lessened deterrent effect of the law … could promote piracy…."
Of course, sophisticated digital rights management technologies — which will become the lingua franca of entertainment companies living in a tangled web — could be abused by copyright owners, who overcharge or invade privacy in the name of preventing piracy; but where and when that might occur, the marketplace of consumer opinion and behavior will deal with it accordingly, presumably by not shaking the hand that slaps it in the face.
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