A Copyfighter’s Musings

Rafat Ali dropped me a line with a question about the Tivo-Netflix deal.  Pointing to this post by Jeremy Allaire, he wanted to know about how first sale might affect licensing for online movies.  Here’s my response:

Good question. 17 USC 109 (the first sale doctrine) is even stronger for movies. Music and computer programs have limitations regarding rental; movies (and books) have no such limitations. While some video stores (e.g., Blockbuster) have entered into licensing and revenue agreements with the studios, any video store can simply buy copies of DVDs and rent/sell them to customers without getting the approval of copyright holders.

However, Jeremy is basically right in his statement: they can’t just take the content off of the DVDs and put it online. Just like we discussed with eBay, first sale only applies to the distribution right, and it only applies to lawfully made copies. Putting the songs online would implicate the right to copy, and the only clearly lawfully made copy is the DVD that Netflix owns. Also, distributing the movies via streams might implicate the public performance right.

As we have seen in the music industry, these definitional issues (copying v. distribution v. performance) can be a huge drag on license negotiations. Just as the first sale doctrine protected rental outlets in the analog world, the mechanical compulsory aided distributors of music. For the digital world, Harry Fox Agency, the record labels, and online distributors have long fought over what requires a mechanical and what falls under the compulsory. See the Section 115 hearing testimony.

We’ve seen some licensing problems with the online movie industry. Beyond the anti-trust suit against Movielink, see the Video Pipeline case, in which a licensed distributor of movie trailers was barred from putting those same trailers online.

Filed by Derek Slater at 7:13 pm under General news
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