Secondary Markets for Copyrighted Works and the ‘Ownership Divide’: Reconciling Competing Intellectual and Personal Property Rights

Abstract

The weight of precedent supports restricting the ability of copyright holders to control post-purchase modification and resale in secondary markets. To find infringement in the absence of copying disrupts clear and intentional legislative distinction between economic and moral rights. The economic rights conferred by intellectual property law do not affect the purchaser’s personal property rights to deal with the transferred tangible good, provided that any subsequent modification deals only with the tangible good and does not multiply the occurrences of the protected work. Precedent alone, however, is not a complete answer to novel legal questions. Consideration of underlying first principles upon which doctrinal rules are based is also required. From this perspective, the freedom to operate in secondary markets is consistent with the normative basis of copyright law: (a) copyright is a balance between the necessary incentives to create and the public interest in the encouragement and dissemination of works; and (b) in achieving the appropriate balance between these two goals, over-compensation is as much a cause for concern as undercompensation, lest the rights of copyright holders expand to the detriment of the public interest.

Keywords: intellectual property, copyright, secondary markets, resale, modification, personal property