Saturday, April 20, 2024

When It Comes to Resale Royalties, How to Interpret the First Sale Doctrine?


This is the main question currently before the Ninth Circuit Court of Appeals.

The plaintiffs argue in their opening brief that “[t]he first sale doctrine prevents copyright holders from prohibiting or controlling downstream distribution of copyrighted works. . . .  It has nothing to do with the right of copyright holders to possess a financial interest in the proceeds of a sale.”

The defendants counter that “[u]nder the first sale doctrine, once a visual artist sells artwork, the artist loses the ability to interfere with future sales.”

Regardless of the court’s decision, this is a case the art industry should watch. As this online article points out, “[i]f the Ninth Circuit decides in favor of the plaintiffs, holding that the CRRA is not preempted by the Copyright Act of 1976, it may inspire other states to enact similar legislation codifying droit de suite. If the defendants prevail, and the CRRA is struck down, it may re-ignite interest in a federal codification of droit de suite that amends the first sale doctrine..


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