our research

What We Buy When We Buy Now

165 University of Pennsylvania Law Review (forthcoming)

with Chris Jay Hoofnagle

Retailers like Apple and Amazon market digital media to consumers using the familiar language of ownership, including phrases like "buy now,” “own,” and ”purchase." Consumers may understandably associate such language with strong personal property rights. But the license agreements and terms of use associated with these transactions tell a very different story. They explain that ebooks, mp3 albums, digital movies, games, and software are not sold, but merely licensed. Those terms limit consumers' ability to resell, lend, transfer, and even retain the digital media they acquire.

This article presents the results of the first-ever empirical study of consumers' perceptions of the marketing language used by digital media retailers. We created a fictitious Internet retail site and surveyed a nationally representative sample of nearly 1300 online consumers. The resulting data reveal a number of insights about how consumers understand—or misunderstand—digital transactions. A surprisingly high percentage of consumers believe that when they “Buy Now,” they acquire the same sorts of rights to use and transfer digital media goods that they enjoy for physical goods. The survey also strongly suggests that these rights matter to consumers. Consumers are willing to pay more for them and are more likely to acquire media through other means, both lawful and unlawful, in their absence. Finally, our study suggests that a relatively simple and inexpensive intervention—adding a short notice to a digital product page that outlines consumer rights in straightforward language—is an effective means of significantly reducing consumer misperceptions.


Reconciling Personal & Intellectual Property

90 Notre Dame Law Review 1213 (2015)

Copyright law sets up an inevitable tension between the intellectual property of creators and the personal property of consumers — in other words, between copyrights and copies. For the better part of the last century, copyright law successfully mediated this tension through the principle of exhaustion — the notion that once a rights holder transfers a copy of a work to a new owner, its rights against that owner are diminished.

Rather than an idiosyncratic carveout or exception, exhaustion is an inherent part of copyright law’s balance between the rights of creators and the rights of the public. Nonetheless, many rights holders and some courts see exhaustion as nothing more than a loophole or market inefficiency that allows consumers to make unauthorized uses of intellectual property rightly controlled by the copyright owner. Two developments threaten to curtail exhaustion and consumer interests. First, content owners have endeavored to eliminate the personal property interests of consumers, redefining the notion of ownership by characterizing their transactions with consumers as licenses. Second, the tangible copy is rapidly disappearing as copyright markets shift from the distribution of physical products to exchanges of networked information.

In short, the equilibrium between personal and intellectual property that exhaustion enabled depends on doctrinal assumptions about the copyright marketplace that are quickly becoming outdated. By examining the basic functions of copy ownership, this Article will attempt to construct a notion of consumer property rights in digital media that acknowledges the shift away from tangible artifacts while preserving exhaustion’s central role in the intellectual property system.


Legislating Digital Exhaustion

28 Berkeley Technology Law Journal 1535 (2015)

The digital shift in distribution, from markets premised on disposing of physical artifacts to markets defined by data flows, is among the most important changes in the copyright landscape since the enactment of the 1976 Copyright Act. The disconnect between this new reality and our current statutory rules is particularly evident when it comes to the question of exhaustion. The first sale doctrine embodied within Section 109 was constructed around a mode of dispossession that is rapidly becoming obsolete. As a result, the benefits and functions it has long served in the copyright system are at risk. Building on our earlier work, this Article will argue that a meaningful exhaustion doctrine should survive the digital transition. After explaining the two primary hurdles to digital exhaustion under the existing statutory regime, we outline two possible approaches to legislating digital exhaustion, concluding that a flexible standards-based approach that vests considerable authority with the courts is the better solution.


Copyright Exhaustion and the Personal Use Dilemma

96 Minnesota Law Review 2067 (2012)

Copyright law struggles to provide a coherent framework for analyzing personal uses. Although there is widespread agreement that at least some such uses are non-infringing, the doctrinal basis for that conclusion remains unclear. In particular, the prevailing explanations of fair use and implied license are both flawed in important respects.

This Article proposes a new explanation for the favored status of certain personal uses. Drawing on the principle of copyright exhaustion - the notion that once the copyright holder parts with a particular copy of a work, its power to control the use and disposition of that copy is constrained - we argue that many personal uses are rendered lawful by virtue of the simple fact of copy ownership. Owning copies entitles consumers to make certain uses of those copies and the works embodied in them, even in ways that may appear inconsistent with the rights of copyright holders. Under exhaustion, any copy owner has the right to reproduce, modify, and distribute her copy in order to fully realize its value qua copy.

In a variety of personal use cases, courts have been swayed by arguments that highlight the defendant’s purchase or rightful ownership of a copy. But the prevailing approaches to personal use take copy ownership into account inconsistently and awkwardly, forcing courts to shoehorn their intuitions about ownership into doctrines designed to address very different questions. In contrast, exhaustion places copy ownership at the center of the digital personal use debate. And it helps us reconcile our intuitions about the proper scope of consumer control over copies they own with our formal legal articulations of the scope of infringement liability.


Digital Exhaustion

58 UCLA Law Review 889 (2011)

As digital networks emerge as the dominant means of distributing copyrighted works, the first sale doctrine is increasingly marginalized. The limitations first sale places on the exclusive right of distribution are of little importance when the alienation and use of copies entails their reproduction. This fact of the modern copyright marketplace has led to calls for statutory clarification of digital first sale rights.

Acknowledging the obstacles to legislative intervention, this Article argues that courts are equipped today to limit copyright exclusivity in order to enable copy owners to make traditionally lawful uses of their copies, including resale through secondary markets. We argue that first sale is not simply an isolated limitation on the distribution right. Instead, it is a component of a broader principle of copyright exhaustion that emerges from early case law preceding the Supreme Court’s foundational decision in Bobbs-Merrill v. Strauss. This context reveals a common law of copyright exhaustion that embraces a set of user privileges that includes not only alienation, but renewal, repair, adaptation, and preservation. Despite congressional recognition of exhaustion in sections 109 and 117 of the Copyright Act, this Article concludes that courts have ample room to apply and continue to develop common law rules that preserve the many benefits of the first sale doctrine in the digital marketplace.


Related Research

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88 Southern California Law Review 805 (2015)

Ariel Katz

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Joseph Liu

Owning Digital Copies: Copyright Law and the Incidents of Copy Ownership
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Christina Mulligan

A Numerus Clausus Principle for Intellectual Property
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Christina Mulligan

Personal Property Servitudes on the Internet of Things
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R. Anthony Reese

The First Sale Doctrine in the Era of Digital Networks
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John Rothchild

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Molly Shaffer Van Houweling

The New Servitudes
96 Georgetown Law Journal 885 (2008)