Published by LawTechie - April 19, 2013 - LawTechie

intellectual property lawyerThese past two months have seen an uptick in legal wrangling over the ownership of digital goods. Specifically, there has been all out war over the First Sale doctrine which allows purchasers of copyrighted products, like the Google Glass, to resell those products without paying the original author (or creator) a royalty.

The developments have been as follows:

  1. The US Supreme Court ruled on March 19, 2013 that the First Sale doctrine applies to products purchased abroad but then resold in the US. Kirtsaeng v. John Wiley & Sons, 11-697 (Mar. 19, 2013).
  2. BUT, the Southern District of New York noted that the First Sale doctrine does not apply to digital goods, in this case iTunes songs. Capitol Records, LLC v. ReDigi, Inc., 12-cv-95 (S.D.N.Y., March 30, 2013).

Now, seemingly building on New York’s limitation of the doctrine, Google’s terms of service on Google Glass products states that:

“[Y]ou may not resell, loan, transfer, or give your device to any other person. If you resell, loan, transfer, or give your device to any other person without Google’s authorization, Google reserves the right to deactivate the device, and neither you nor the unauthorized person using the device will be entitled to any refund, product support, or product warranty.”

Meaning, you may have thought that you purchased the $1,500 product, but really you are just paying that to license it from Google and Google may deactivate your device if you try to give or sell it to another user. Bye-bye, First Sale doctrine.

Of course, this limitation may only be relaxed by Google after the Google Glass is out of the beta phase, but it is nevertheless interesting how digital licensing law is being used by sophisticated companies to control the use and, yes, the resale of their products. To wit: “hacking” of the Google Glass to avoid deactivation in violation of the terms of use could potentially implicate a user who may simply want to resell his old hardware in a serious infringement of the DMCA anti-circumvention provisions.

Imagine a future where everything we think we own is, in fact, merely licensed…

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.


Enter your email to get started.