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Top Court’s Split 'First-sale' Decision Has No Impact on Used Disc Sales

14 Dec, 2010 By: Erik Gruenwedel

The U.S. Supreme Court’s split decision (4-4, with Justice Elena Kagan recusing herself) will not affect the re-sale of movie discs, music and related copyrighted material, a legal scholar said.

The “first-sale” doctrine provides that if a copy of a protected work (DVD or Blu-ray Disc movie) is made or purchased legally, that copy can be sold or rented without the consent of the owner of the copyright. Once the owner of a protected work has sold a copy of it to someone else, that other person may sell it or rent it without permission of the owner of the copyright. The doctrine underpins the entire video retail business.

The lack of a majority ruling by the top court renders the “non-decision” applicable only to the specific lower court ruling (and subsequent appeal to the 9th Circuit) involving a copyright infringement lawsuit brought against Costco for the sale of a European-based manufacturer’s sports watches.

“It’s as if the court never took the case in the first place. We have to wait for another case like this to come along,” legal blogger Thomas Goldstein told Wired.com.

Costco had bought the Omega watches for a lower price from European-based channels instead of the company’s U.S.-based distributors. Omega, which had copyrighted the watches in the United States, sued for copyright infringement.

The 9th Circuit ruled that “first-sale” applied only to goods produced domestically — not abroad — and to allow so would inappropriately extend copyright laws beyond U.S. borders.

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