How Do You Like your Books

Do you ever wonder how it is that libraries can lend books repeatedly, while copyright owners (e.g., book authors) are granted the exclusive right to distribute their copyrighted works? Or how publishers make money selling books at retail prices when a person can resell books (or buy used books) for much less (hello Amazon Used Books for under a dollar!)? The reason is because of copyright’s “first sale” doctrine, 17 U.S.C. § 109, codifying the common law’s exhaustion principle, which says owners of lawfully made copies are allowed to dispose of those copies without regard to copyright law. In other words: the right to distribute is “exhausted” with the first sale. This means we can resell, lend, or give away our books. What we can’t do is make copies of them. And that is where the concept of “digital lending” runs headlong into copyright law. When libraries buy books, they can lend them without restrictions. When libraries lend e-books, those e-books come with contractual provisions limiting their lending in substantial ways because reading an e-book requires making a copy, which is not exhausted by the first sale doctrine. As the Supreme Court has said (in the patent context, which has a similar first sale principle): “exhaustion applies only to the particular item sold, and not to reproductions.”1