The Undue Reliance on Physical Objects in the Regulation of Information Products

Abstract

The presence of a physical object (a book, DVD, CD) plays a determinant role in how information products (e.g., commercial copies of computer programs, books, musical recordings, video games, and virtual worlds) are regulated, in contrast with copies of similar information products with no physical embodiment. The presence of a physical object influences how law makers distinguish goods from services, to define a contract of sale or license, to apply the first sale doctrine in copyright law, and to determine which acts reserved to copyright holders are involved in a commercial transaction. In this article, I argue that the emphasis on a physical object is to a large extent arbitrary, leads to double standards, legal and normative incoherence, and ultimately that it is detrimental to recipients of information products and copyright user rights.

While law makers’ struggles with dematerialization have been discussed in various areas of law, this article looks at those inadequacies as they relate specifically to information products. I describe how the nebulous zone that immateriality creates may be utilized to the advantage of suppliers of information products. As a result, the undue emphasis on a physical object may contribute to accentuate even more the imbalance of power often present between suppliers and recipients of information products. Resorting to property theory, in particular the concept of ownership, and to the interaction between property and contracts, I identify various criteria that should guide law makers in the regulation of information products, independently of the presence of a physical object.

Keywords: copyright law, consumer law, first sale doctrine, sale of goods law, goods, services, sale, license, property, contracts, information products, computer programs, music, books, virtual worlds, video games

JEL Classification: K1, K10, K11, K12, K39