Exhaustion of copyright in today’s digital market

By Ameet Datta and Suvarna Mandal, Saikrishna & Associates
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The digital market has become an important means of distributing copyright works. In relation to “tangible” copyright works such as books, CDs, etc., the rights and the ability of the copyright owner to assert control over the distribution of the work is well established under what is known as the “doctrine of first sale” or “exhaustion”. Lawmakers and judges around the world are still grappling with the application of this legal doctrine to digital works and goods.

Ameet Datta
Ameet Datta

According to the doctrine, once a product has been put on the market with the consent of the copyright owner, and the product has been lawfully sold, the copyright owner’s right with respect to control of the distribution of the product is exhausted. In countries that follow “international exhaustion”, the first sale of the product anywhere in the world will lead to exhaustion of distribution rights of the copyright owner in that country, while national or regional exhaustion means the copyright owner’s distribution rights will be exhausted only when the first sale of the product is made within the country or a particular region and can be asserted if the product is sold anywhere else in the world.

India follows national exhaustion with respect to copyright works. This doctrine flows from section14(a)(ii) of the Copyright Act, 1957, which states that the owner of a literary, dramatic or musical work, not being a computer programme, has the exclusive right to issue copies of the work to the public “not being copies already in circulation”. Amendments to the act in 2012 extended the exhaustion doctrine to cinematographic films and sound recordings. Sections 14(d)(ii) and 14(e)(ii) now state that the right owner has the exclusive right to sell or give on commercial rental or offer for sale or for such rental “any” copy of the work.

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Ameet Datta is a partner at Saikrishna & Associates, where Suvarna Mandal is an associate. The views expressed in this article are personal.

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