Copyright exhaustion and the personal use dilemma

Minnesota Law Review

Volumn 96, Issue 6, 2012, Pages 2067-2143

  Perzanowski, Aaron ^a   Schultz, Jason ^b  

^a WAYNE STATE UNIVERSITY   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84874159328     PISSN: 00265535     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (375)

1. See John Tehranian, Infringement Nation: Copyright Reform and the Law/Norm Gap, 2007 UTAH L. REV. 537, 543-48 (describing the many ways in which the daily activity of an average person implicates copyright law);
2. Tim Wu, Tolerated Use, 31 COLUM. J.L. & ARTS 617, 618 (2008) ("[T]oday every man, woman, corporation and child has the technological ability to copy and distribute, and therefore to potentially infringe copyright in ways both harm-ful and harmless").
3. But see Aaron Perzanowski, Fixing RAM Copies, 104 NW. U. L. REV. 1067, 1068 (2010) (arguing against a reading of the Copyright Act that treats temporary instantiations in computing devices' RAM as "copies").
4. The ability to make use of the copies we purchase, after all, is central to the value proposition that motivates consumers to acquire copies in the first place. See Interview by Charlie Rose with Bob Iger, President and CEO, Walt Disney Co., on Charlie Rose: The Magical World of Disney; The Rise and Fall of the Shah of Iran-Part I (PBS television broadcast Mar. 3, 2011), available at http://www.charlierose.com/view/interview/11514 ("[Consumers] don't want to be slave to the old format or the old schedule that was forced upon them by a tele-vision network or traditional media company . . . . So what we must do is make the product available to them under flexible or expanded circumstances.").
5. This more accepting position toward personal use has evolved over time. See U.S. CONGRESS OFFICE OF TECH. ASSESSMENT, OTA-CIT-422, COPYRIGHT & HOME COPYING: TECHNOLOGY CHALLENGES THE LAW 7 (1989) [hereinafter OTA STUDY] (noting copyright proprietors' argument that "the aggregate eco-nomic effect of individuals' private use is equivalent to commercial piracy");
6. see also Jessica Litman, Lawful Personal Use, 85 TEX. L. REV. 1871, 1878-79 (2007) (suggesting that custom might also have been a historical reason for allowing personal uses).
7. Tom W. Bell, Fair Use vs. Fared Use: The Impact of Automated Rights Management on Copyright's Fair Use Doctrine, 76 N.C. L. REV. 557, 557 (1998).
8. They may also implicate the exclusive rights of public display and performance, depending on the development of the law in these areas. See, e.g., United States v. Am. Soc'y of Composers, Authors & Publishers, 627 F.3d 64, 73 (2d Cir. 2010) (holding that the mere downloading of music over the Internet does not constitute a "public performance" of that work with regard to the Copyright Act)
9. cert. de-nied, 132 S. Ct. 366 (2011);
10. Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 134-40 (2d Cir. 2008) (concluding that playback transmissions of copies are not "performances" to the public);
11. Ryan Singel, Movie Studios Sue DVD Streaming Site Zediva, ARS TECHNICA (Apr. 4, 2011), http://arstechnica .com/tech-policy/news/2011/04/movie-studios- sue-dvd-streaming-site-zediva.ars (raising this argument with an online movie rental service).
12. See, e.g., MOONDOG DIGITAL, http://www.moondogdigital.com (last vis-ited Aug. 12, 2011) (describing third-party CD ripping service).
13. Nicole Kobie, Format Shifting May Finally Be Legalised, PC PRO (Aug. 2, 2011), http:// www.pcpro.co.uk/news/369064/format-shifting-may-finally-be- legalised/ ("Private copying is carried out by millions of people and many are astonished that it is illegal in [the United Kingdom].");
14. see also Martin Kretschmer, Private Copy-ing and Fair Compensation: An Empirical Study of Copyright Levies in Eu-rope, U.K. INTELL. PROP. OFFICE 4 (2011), http://www.cippm.org.uk/pdfs/ copyright-levy-kretschmer.pdf ("The scope of consumer permissions under the statutory exceptions for private copying within the EU vary, and generally do not match with what consumers ordinarily understand as private activities.");
15. Christopher Williams, Poll: 55% Break Copyright Law, REGISTER (May 12, 2006, 06:02 GMT), http://www.theregister.co.uk/2006/05/12/ncc-copyright-poll/ (reporting that in the U.K., 55% of survey respondents have copied their own CDs, believing it legal to do so).
16. See, e.g., Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 419-20 (1984) (suit against VCR manufacturer);
17. Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 134-40 (2d Cir. 2008) (operator of a remote storage digital video record (DVR) system);
18. Storage Tech. Corp. v. Custom Hardware Eng'g & Consulting, Inc., 421 F.3d 1307, 1309-10 (Fed. Cir. 2005) (firm that repaired and maintained plaintiff's data storage machines);
19. Univer-sal City Studios, Inc. v. Corley, 273 F.3d 429, 435-36 (2d Cir. 2001) (coder of decryption computer program designed to circumvent DVD copyright protec-tion software);
20. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1011 (9th Cir. 2001) (peer-to-peer MP3 file sharing service);
21. Recording Indus. Ass'n of Am. v. Diamond Multimedia Sys. Inc., 180 F.3d 1072, 1073 (9th Cir. 1999) (manufacturer of a device allowing the user to listen to MP3 files downloaded from a computer);
22. Columbia Pictures Indus., Inc. v. Redd Horne, Inc., 749 F.2d 154, 156-57 (3d Cir. 1984) (video store that showed movies to patrons in on-site, closed booths);
23. Chamberlain Grp., Inc. v. Skylink Techs., Inc., 292 F. Supp. 2d 1023, 1024-26 (N.D. Ill. 2003) (distributor of remote controls capable of activating garage door openers manufactured by the plaintiff)
24. aff'd, 381 F.3d 1178 (Fed. Cir. 2004);
25. On Command Video Corp. v. Columbia Pictures Indus., 777 F. Supp. 787, 788-89 (N.D. Cal. 1991) (designer of a system that electronically transmitted movies to hotel rooms).
26. But see, e.g., Eva Galperin, EFF Seeks to Help Righthaven Defendants, ELEC. FRONTIER FOUND. DEEPLINKS BLOG (Aug. 25, 2010), https://www.eff.org/ deeplinks/2010/08/eff-seeks-righthaven-defendants/ (discussing a company that directly sued blog-gers for using copyrighted news content without permission).
27. See MDY Indus., LLC v. Blizzard Entm't, Inc., 629 F.3d 928, 936 (9th Cir. 2010) (noting that the root of the defendant's counterclaim was activity discovered after it implemented game-detection software);
28. Sonia K. Katyal, Privacy vs. Piracy, 9 INT'L J. COMM. L. & POL'Y 1, 41-95 (2004) (describing pri-vate piracy surveillance regimes);
29. see also David Kravets, Newspaper Chain's New Business Plan: Copyright Lawsuits, WIRED THREAT LEVEL BLOG (July 22, 2010) http://www.wired.com/ threatlevel/2010/07/copyright-trolling-for-dollars/(reporting a company's efforts to find copyright infringers by "scouring the in-ternet for infringing copies of [its] client's articles");
30. Fred von Lohmann, YouTube's Content ID (C)ensorship Problem Illustrated, ELEC. FRONTIER FOUND. DEEPLINKS BLOG (Mar. 2, 2010), https://www.eff.org/ deeplinks/ 2010/03/youtubes-content-id-censorship-problem/ (discussing issues that have arisen with YouTube's automated content blocking system, Content ID);
31. Me-dia Sentry, WIKIPEDIA, http://en.wikipedia.org/wiki/MediaSentry (last visited Apr. 28, 2012) (describing a company that located and identified IP address-es associated with activities infringing certain copyrights).
32. See Greg Sandoval, Exclusive: Top ISPs Poised to Adopt Graduated Response to Piracy, CNET NEWS (June 22, 2011), http://news.cnet.com/8301 -31001-3-20073522-261/exclusive-top-isps-poised-to-adopt-graduated-response-to- piracy/ (stating that the Recording Industry Association of Ameri-ca and Motion Picture Association of America "have labored for years to per-suade ISPs to take a tougher antipiracy position" and detailing a proposal whereby the ISPs would enforce copyright law against their customers).
33. Nate Anderson, U.S. in 2005: Legalizing TiVo, CD Ripping "Sends the Wrong Message," ARS TECHNICA (May 2, 2011), http://arstechnica.com/tech- policy/news/2011/05/us-in-2005-legalizing-tivo-cd-ripping-sends-the-wrong- message.ars/ (citing a trade group report arguing that legalizing for-mat-shifting "threatens the roll-out of new formats and the development of in-novative consumer delivery mechanisms").
34. See Complaint at 1, 2, Warner Bros. Entm't Inc. v. WTV Sys., Inc., 2011 WL 4001121 (C.D. Cal. Aug. 1, 2011) (No. CV 11-2817-JFW (Ex)
35. 2011 WL 1235191, at *1, *2 (alleging that the defendants' Internet video-on-demand service violated the plaintiffs' copyrights, defendants' comparison of their service to a traditional rental store notwithstanding);
36. Ryan Singel, Fed-eral Judge Orders Shutdown of Innovative DVD-Streaming Service Zediva, WIRED EPICENTER BLOG (Aug. 2, 2011), http://www.wired.com/ epicenter/2011/08/zediva -preliminary-injunction/(observing that a preliminary injunction was issued against the Zediva service at issue in Warner Bros. Entertainment Inc. v. WTV Systems, Inc., even though Zediva users did not necessarily watch its movies in a public place).
37. See Michael Robertson, Behind the Scenes-EMI Sues MP3tunes, http://michaelrobertson.com/archive.php?minute-id=247 (last visited May 4, 2012) (describing the "Music Locker" service that allows for the online storage of music collections);
38. Janko Roettgers, Will the MPAA Target RapidShare, Megaupload or Dropbox?, GIGAOM (Feb. 9, 2011), http://gigaom.com/video/ mpaa-lawsuit-hotfile- rapidshare-megaupload-dropbox/ (describing litigation against other cloud storage providers).
39. This development can be seen as a direct result of the safe harbors provided by current models of secondary liability, § 512 of the Digital Millennium Copyright Act, § 230 of the Communications Decency Act, and the voli-tional doctrine. See 17 U.S.C. § 512(c) (2006) (affording a safe harbor to ISPs that store violative copies at the direction of a user);
40. CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 549 (4th Cir. 2004) (invoking the volitional doc-trine to state that the Copyright Act "requires conduct by a person who causes in some meaningful way an infringement");
41. Realnetworks, Inc. v. DVD Copy Control Ass'n, 641 F. Supp. 2d 913, 926 (N.D. Cal. 2009) (noting the plaintiff's End User License Agreement instructed purchasers to use the plaintiff's soft-ware only for legally permissible purposes);
42. Doug Lichtman & Eric P. Posner, Holding Internet Service Providers Accountable, in THE LAW AND ECONOMICS OF CYBERSECURITY 223, 223 (Mark F. Grady & Francesco Parisi eds., 2006) ("Section 230 of the Communications Decency Act of 1996 . . . in many ways immuniz[ed] Internet service providers from liability for defamatory content that is provided by business partners or customers but disseminated by the ISP itself.");
43. Google and Apple have also launched cloud-based music servers, with Apple striking the most comprehensive licensing deals so far. See Casey John-ston, Apple Details iCloud's Digital Storage and Syncing, Free 5GB of Storage, ARS TECHNICA (June 6, 2011), http://arstechnica.com/apple/news/2011/06/apple- details-iclouds-digital-storage-and-syncing-free-5gb-of-storage.ars. The question remains, however, whether and to what extent such licenses are re-quired by law.
44. See Jacqui Cheng, Amazon on Cloud Player: We Don't Need No Stinkin' Licenses, ARS TECHNICA (Mar. 29, 2011), http://arstechnica.com/media/news/2011/ 03/amazon-on-cloud-player-we-dont-need-no-stinkin-licenses.ars.
45. This presumption also comes across candidly in the approach of other user-driven content sites. See, e.g., Additional Terms of Service for Google Mu-sic, GOOGLE MUSIC, http://music.google.com/about/terms.html (last visited Apr. 28, 2012) ("You retain any rights you already hold in Your Music....You confirm and warrant to Google that you have all the rights, power and author-ity to grant any permissions and give any instructions to Google that may be required to perform the actions necessary to provide you with the Service. You agree that you will not upload, submit, access, manage, play back, display or use any Content (including any portion of Your Music), or direct Google to do anything with Your Music on your behalf, unless you have all of the necessary rights to do so without infringing the rights of any third party or violating any laws or agreements that apply to you, the Content, or Your Music.");
46. Changes to Our Policies (Updated), DROPBOX BLOG (July 1, 2011), http://blog.dropbox .com/?p=846 (seeking user licenses on the presumption that they have rights to the content).
47. While many of these terms may be part of various belt-and-suspenders efforts to ensure protection under 17 U.S.C. § 512's safe harbors and the Cartoon Network/Costar doctrine of nonvolitional conduct
48. 536 F.3d at 130-33;
49. 373 F.3d at 550, taken at face value, they infer heavy dependence on user authority to justify the reproductions, distributions, adaptations, dis-plays, and performances necessary to implement these services.
50. Capitol Records Sues ReDigi, CHI. TRIB., Jan. 9, 2012, available at http://www.chicagotribune.com/entertainment/sns- 201201091701reedbusivarietynvr1118048313jan09,0,221702.story.
51. See generally Aaron Perzanowski & Jason Schultz, Digital Exhaus-tion, 58 UCLA L. REV. 889 (2011) (discussing digital exhaustion in the context of "a common law of copyright exhaustion that embraces a set of user privileg-es that include not only alienation but renewal, repair, adaptation, and preservation").
52. For example, some courts have found that the exclusive right of repro-duction covers the automatic creation of copies of web pages made in a com-puter user's local browser cache file as well as when a computer program is loaded into a user's Random Access Memory on her computer-both quintes-sential personal uses. See MDY Indus., LLC v. Blizzard Entm't Inc., 629 F.3d 928, 938 (9th Cir. 2010);
53. Perfect 10, Inc. v. Google, 416 F. Supp. 2d 828, 852 n.17 (C.D. Cal. 2006)
54. aff'd in part, rev'd in part, remanded on other grounds, Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).
55. citing Mitch Bainwol, Chair-man and CEO, Recording Indus. Ass'n of Am., State of the Union Panel Dis-cussion at the Future of Music Coalition Fifth Annual Policy Summit (Sept. 12, 2005), available at http://www.futureofmusic. org/audio/summit05/panel04 .stateofunion.mp3);
56. citing Transcript of Oral Argument at 11-12, Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (No. 04-480), available at http://www.supremecourtus.gov/oral-arguments/argument-transcripts/04-480.pdf);
57. Others have viewed it through the lens of copy-right's statutory definitions of public versus private. See Sony Corp. of Am. v. Universal Studios, Inc., 464 U.S. 417, 468-70 (1984).
58. However, new digital and network technologies continue to dissolve these barriers faster than the law can construct them. With a single click of a key, a private personal use can quickly become publicly available worldwide, and one's friends and family can include thousands. See Universal City Studios, Inc. v. Corley, 273 F.3d 429, 437-40 (2d Cir. 2001);
59. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1011-13 (9th Cir. 2001);
60. DVD Copy Control Ass'n v. Bunner, 75 P.3d 1, 7 (Cal. 2003).
61. See Sony, 464 U.S. at 429 (finding copyright's constitutional purpose "to motivate the creative activity of authors and inventors by the provision of a special reward, and to allow the public access to the products of their genius after the limited period of exclusive control has expired.");
62. See Sony, 464 U.S. at 429.
63. citing Yochai Benkler, Free as the Air to Common Use: First Amendment Constraints on Enclosure of the Public Domain, 74 N.Y.U. L. REV. 354, 393 (1999);
64. Yochai Benkler, From Consumers to Users: Shifting the Deeper Structures of Regulation Towards Sustainable Commons and User Access, 52 FED. COMM. L.J. 561, 565-68 (2000);
65. Yochai Benkler, Through the Looking Glass: Alice and the Constitutional Foundations of the Public Domain, 66 LAW & CONTEMP. PROBS., Winter-Spring 2003 at 173, 176;
66. Neil Weinstock Netanel, Copyright and a Democratic Civil Society, 106 YALE L.J. 283, 371-76 (1996);
67. Rebecca Tushnet, Copy This Essay: How Fair Use Doctrine Harms Free Speech and How Copying Serves It, 114 YALE L.J. 535, 587 (2004).
68. See R. Anthony Reese, The First Sale Doctrine in the Era of Digital Networks, 44 B.C. L. REV. 577, 594, 599 (2003) (noting greater need for both access and preservation when works or permissions are no longer available from the copyright owner).
69. Julie E. Cohen, A Right to Read Anonymously: A Closer Look at "Copy-right Management" in Cyberspace, 28 CONN. L. REV. 981, 1026-27 (1996);
70. Julie E. Cohen, Copyright and the Jurisprudence of Self-Help, 13 BERKELEY TECH. L.J. 1089, 1142 (1998);
71. Joseph Liu, Own-ing Digital Copies: Copyright Law and the Incidents of Copy Ownership, 42 WM. & MARY L. REV. 1245, 1333-36 (2001);
72. citing L. Ray Patterson, Free Speech, Copyright, and Fair Use, 40 VAND. L. REV. 1, 61 (1987) (internal cita-tions omitted).
73. This rationale has also been endorsed by the Supreme Court in both its copyright and patent exhaustion cases. See Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 626 (2008) ("'[T]he right to vend is exhausted by a single, unconditional sale, the article sold being thereby carried outside the monopoly of the patent law and rendered free of every restriction which the vendor may attempt to put upon it.'"
74. quoting Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 509, 516 (1917);
75. Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 350 (1908) ("In our view the copyright statutes, while protecting the owner of the copyright in his right to multiply and sell his production, do not create the right to impose, by notice, such as is disclosed in this case, a limitation at which the book shall be sold at retail by future purchas-ers, with whom there is no privity of contract.").
76. See Quanta Computer, 553 U.S. at 626;
77. Bobbs-Merrill, 210 U.S. at 350.
78. David Kravets, Jury in RIAA Trial Slaps $2 Million Fine on Jammie Thomas, WIRED (June 18, 2009, 6:57 PM), http://www.wired.com/threatlevel/2009/ 06/riaa-jury-slaps-2-million-fine-on-jammie-thomas;
79. Lenz v. Universal, ELEC. FRONTIER FOUND., https://www.eff.org/cases/lenz- v-universal (last visited Feb. 21, 2012);
80. Phillip Torrone, Sony's War on Makers, Hackers, and Innovators, MAKE (Feb. 24, 2011), http://blog .makezine.com/2011/02/24/sonys-war-on-makers- hackers-and-innovators.html.
81. See, e.g., Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005);
82. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984);
83. In re Aimster Copyright Litig., 334 F.3d 643 (7th Cir. 2003);
84. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001);
85. Princeton Univ. Press v. Mich. Document Servs., Inc., 99 F.3d 1381 (6th Cir. 1996);
86. Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1988);
87. Disney Enters., Inc. v. Hotfile Corp., 798 F. Supp. 2d 1303 (S.D. Fla. 2011);
88. Capitol Records, Inc. v. MP3tunes, LLC, 2009 WL 3364036 (S.D.N.Y. Oct. 16, 2009);
89. Paramount Pic-tures Corp. v. Replay TV, 298 F. Supp. 2d 921 (C.D. Cal. 2004);
90. Lewis Galoob Toys, Inc. v. Nintendo of Am., Inc., 780 F. Supp. 1283 (N.D. Cal. 1991)
91. aff'd, 964 F.2d 965 (9th Cir. 1992).
92. For a history of the development and launch of the Betamax and the ensuing legal dispute, see JAMES LARDNER, FAST FORWARD: HOLLYWOOD, THE JAPANESE, AND THE ONSLAUGHT OF THE VCR (1987).
93. See Fred von Lohmann, Fair Use as Innovation Policy, 23 BERKELEY TECH. L.J. 829, 836-40 (2008).
94. See, e.g., Jay Yarow, Apple Paying $100-$150 Million to Labels for iCloud, BUSINESS INSIDER (June 3, 2011, 8:52 AM), http://www.businessinsider.com/apple-paying-100-150-million-to-labels-for- icloud-2011-6.
95. See Greg Sandoval, Spotify-Google iTunes Killer Lacks Licenses, CNET MEDIA MAVERICK (Jan. 4, 2010, 4:27 PM), http://news.cnet.com/8301 -31001-3-10424684-261.html (detailing negotiations over music licenses for free music service Spotify).
96. In this sense, personal user innovation is a version of what Molly Van Houweling and Julie D. Mahoney call "the problem of the future"-unanticipated future benefits or desires that cannot easily be realized in a cost-effective manner if current owners of an item must find and renegotiate with the former owners for new permissions. Julia D. Mahoney, Perpetual Re-strictions on Land and the Problem of the Future, 88 VA. L. REV. 739 (2002);
97. Molly Shaffer Van Houweling, The New Servitudes, 96 GEO. L.J. 885, 900-04 (2008). Courts have historically solved this problem via their distaste for ongo-ing servitudes on personal property.
98. quoting Thomas W. Merrill & Henry E. Smith, Optimal Standardization in the Law of Property: The Numerus Clausus Principle, 110 YALE L.J. 1, 8 (2000).
99. Terms and Conditions, APPLE, http://www.apple.com/legal/itunes/us/ terms.html (last visited Apr. 28, 2012).
100. see Florencia Marotta-Wurgler, Does Increased Disclosure Help? Evaluating the Recommendations of the ALI's "Principles of the Law of Software Contracts," 78 U. CHI. L. REV. 165, 168 (2011) (finding that the low expected benefit of reading a software contract leads to readership rates "on the order of 0.1 per-cent to 1 percent").
101. See, e.g., All Hail West Texas, APPLE ITUNES, http://itunes.apple.com/us/ album/all-hail-west-texas/id266718685 (last visited Apr. 28, 2012) (an Apple iTunes page for a digital album allowing consumers to "buy");
102. Bad Lieu-tenant: Port of Call New Orleans, VUDU, http://www.vudu.com/ movies/#! content/172453/Bad-Lieutenant-Port-of-Call-New-Orleans (last visited Apr. 28, 2012) (a Vudu page that allows consumers the option to "own" a film);
103. Fa-ther, Son, Holy Ghost (Amazon MP3 Exclusive), AMAZON, http://www.amazon .com/Father-Holy-Ghost-Amazon-Exclusive/dp/B005KCZRI8 (last visited Apr. 28, 2012) (an Amazon page for a digital album that allows consumers to "Buy MP3");
104. iTunes, APPLE, http://www.apple.com/itunes/ (last visited Apr. 28, 2012) (Apple's main iTunes page, which describes the consumer's action as a "purchase").
105. See Brian W. Carver, Why License Agreements Do Not Control Copy Ownership: First Sales and Essential Copies, 25 BERKELEY TECH. L.J. 1887, 1915-25 (2010) (describing two judicial approaches that track with the idea that consumer expectations about transactions help to determine consumer rights to electronic property);
106. Pamela Samuelson & Jason Schultz, Should Copyright Owners Have to Give Notice of Their Use of Technical Protection Measures?, 6 J. ON TELECOMM. & HIGH TECH. L. 41, 58-59 (2007) (describing the problematic nature of perpetual possession of electronic goods when the underlying businesses or services may be shut down).
107. The Copyright Act defines these rights in § 106. 17 U.S.C. § 106 (2006).
108. 17 U.S.C. § 109(a), (c).
109. 17 U.S.C. § 117.
110. For examples of applications that allow such use or adaptation, see Dropbox, APPLE ITUNES, http://itunes.apple.com/us/app/dropbox/id327630330?mt=8 (last visited Apr. 28, 2012) ("Dropbox is a free service that lets you bring all your photos, docs, and videos anywhere. any file you save to your Dropbox will automatically save to all your computers, your iPhone and iPad and even the Dropbox website!");
111. PDF Expert, APPLE ITUNES, http://itunes.apple.com/us/app/pdf-expert-fill- forms-annotate/id393316844 ?mt=8 (last visited May 4, 2012) (an application that allows PDF files to be read on mobile devices).
112. Further complicating the question of statutory interpretation, the na-ture of what is "public" versus "private" when it comes to digital personal uses has changed dramatically. Take, for example, the recent preliminary injunc-tion motion brought against the startup DVD service Zediva. Complaint, Warner Bros. Entm't Inc. v. WTV Systems, Inc., No. CV11-02817 JFW (EX), 2011 WL 1235191 (C.D. Cal. Apr. 4, 2011). Zediva offers a service whereby it purchases DVDs and inserts them into players in its warehouse.
113. The player then streams the movie over the In-ternet to the private device of the member's choosing. Id. In granting the Mo-tion Picture Association of America's preliminary injunction motion against Zediva, the Court found that even though Zediva had purchased legitimate copies of movies and many consumers were likely watching those movies in the privacy of their own homes, the streaming of the movie still constituted a public performance. Warner Bros. Entm't Inc. v. WTV Sys., Inc., No. CV 11-2817-JFW (Ex), 2011 WL 4001121, at *6-7 (C.D. Cal. Aug. 1, 2011).
114. For other cases highlighting the problematic "private" versus "public" debate, see Co-lumbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F.2d 154, 160 (3d Cir. 1984)
115. On Command Video Corporation v. Columbia Pictures Industries, 777 F. Supp. 787, 789-90 (N.D. Cal. 1991).
116. For a conflicting ruling, see Co-lumbia Pictures v. Professional Real Estate Investors, Inc., 866 F.2d 278, 281-82 (9th Cir. 1989).
117. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 575-76 (1994).
118. 17 U.S.C. § 107 (2006). In addition, Congress identified several illus-trative fair uses, including teaching, news reporting, criticism, commentary, scholarship, and research. Id. However, courts have not confined fair uses to this list; various decisions have recognized search engines copying web pages in order to provide better results, software companies reverse engineering products in order to create compatible offerings, and education services copy-ing student essays in order to detect plagiarism as fair uses.
119. See A.V. v. iParadigms, LLC, 562 F.3d 630 (4th Cir. 2009) (detecting plagiarism);
120. Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) (information loca-tion tools);
121. Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003) (same);
122. Sony Computer Entm't, Inc. v. Connectix Corp., 203 F.3d 596 (9th Cir. 2000) (reverse engineering);
123. Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992) (same).
124. See Wall Data Inc. v. L.A. Cnty. Sheriff's Dep't, 447 F.3d 769, 778 (9th Cir. 2006) (noting that fair use may be appropriate where the "custom or pub-lic policy" at the time would have defined the use as reasonable
125. citing STAFF OF S. SUBCOMM. ON PATENTS, TRADEMARKS, AND COPYRIGHTS, STUDY NO. 14: FAIR USE OF COPYRIGHTED WORKS 15 (Comm. Print 1960).
126. see Barton Beebe, An Empirical Study of U.S. Copyright Fair Use Opinions, 1978-2005, 156 U. PA. L. REV. 549, 583 (2008).
127. See, e.g., H.R. REP. NO. 94-1476, at 73 (1976) ("Another special in-stance illustrating the application of the fair use doctrine pertains to the mak-ing of copies or phonorecords of works in the special forms needed for the use of blind persons. These special forms, such as copies in Braille and phonorecords of oral reading (talking books), are not usually made by the pub-lishers for commercial distribution. . . . While the making of multiple copies or phonorecords of a work for general circulation requires the permission of the copyright owner, a problem addressed in section 70 of the bill, the making of a single copy or phonorecord by an individual as a free service for a blind per-sons [sic] would properly be considered a fair use under section 107.");
128. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 455 n.40 (1984) (stating that copying "of a copyrighted work for the convenience of a blind per-son is expressly identified by the House Committee Report as an example of fair use, with no suggestion that anything more than a purpose to entertain or to inform need motivate the copying").
129. Neil Weinstock Netanel, Making Sense of Fair Use, 15 LEWIS & CLARK L. REV. 715, 736 (2011);
130. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994)
131. quoting Pierre N. Leval, Toward a Fair Use Standard, 103 HARV. L. REV. 1105, 1111 (1990);
132. see also Pamela Samuelson, Unbundling Fair Uses, 77 FORDHAM L. REV. 2537, 2548-55 (2009).
133. Campbell, 510 U.S. at 579.
134. In fact, Apple and other vendors have specifically invested in technol-ogy to accomplish this. See, e.g., Apple Lossless, WIKIPEDIA, http://en.wikipedia.org/wiki/Apple-Lossless (last visited Apr. 28, 2012) (describing Apple's pro-prietary lossless compression codec).
135. Cass R. Sunstein, On the Expressive Function of Law, 144 U. PA. L. REV. 2021-53 (1996) (arguing that law should signal to citizens information about social norms and appropriate conduct);
136. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).
137. Blanch v. Koons, 467 F.3d 244 (2d Cir. 2006).
138. Shloss v. Sweeney, 515 F. Supp. 2d 1068 (N.D. Cal. 2007).
139. Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985).
140. Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828 (C.D. Cal. 2006).
141. Kelly v. Arriba Soft Corp., 280 F.3d 934 (9th Cir. 2002).
142. Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992).
143. For example, in one case finding personal browser caching to be fair use, the court claimed that "[l]ocal caching by the browsers of individual users is noncommercial, transformative, and no more than necessary to achieve the objectives of decreasing network latency and minimizing unnecessary band-width usage (essential to the internet)." Google, 416 F. Supp. 2d at 852 n.17.
144. However, the court relegated this analysis to a footnote and never explained how this "automatic process of which most users are unaware" qualifies as transformative. Id. While it may well be, the Google court offers us little in-formation on the basis for its conclusion. See also Realnetworks, Inc. v. DVD Copy Control Ass'n, 641 F. Supp. 2d 913, 942 (N.D. Cal. 2009) (noting that "it may well be fair use for an individual consumer to store a backup copy of a personally-owned DVD on that individual's computer" without articulating a doctrinal rationale for this conclusion).
145. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 421 (1984) (describing timeshifting as a television viewer recording broadcast pro-grams for later viewing).
146. See Wendy J. Gordon, Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and Its Predecessors, 82 COLUM. L. REV. 1600, 1618 (1982).
147. See Rochelle Dreyfuss, Expressive Genericity: Trademarks as Lan-guage in the Pepsi Generation, 65 NOTRE DAME L. REV. 397, 403 (1990);
148. Mark A. Lemley, Place and Cyberspace, 91 CALIF. L. REV. 521, 533 n.49 (2003) [here-inafter Lemley, Place and Cyberspace].
149. But see Mark A. Lemley, Should a Licensing Market Require Licens-ing?, LAW & CONTEMP. PROBS., Spring 2007, at 185, 189-91[hereinafter Lemley, Licensing Market].
150. See Sony, 464 U.S. at 454-55 (concluding that personal copying of 100% of work is fair when used for noncommercial time shifting);
151. A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 642 (4th Cir. 2009) (concluding that the use of student papers is protected by fair use);
152. Perfect 10, Inc. v. Am-azon.com, Inc., 508 F.3d 1146, 1176 (9th Cir. 2007);
153. Kelly v. Arriba Soft Corp., 336 F.3d 811, 815 (9th Cir. 2003);
154. Bond v. Blum, 317 F.3d 385, 393, 397 (4th Cir. 2003) (holding that the use of an entire book is protected by fair use);
155. Nuñez v. Caribbean Int'l News Corp., 235 F.3d 18, 24 (1st Cir. 2000) (finding that the use of an entire photograph is "of little consequence to our [fair use] analysis");
156. accord In re Aimster Copyright Litig., 334 F.3d 643, 648 (7th Cir. 2003);
157. Recording Indus. Ass'n of Am. v. Diamond Multimedia Sys. Inc., 180 F.3d 1072, 1081 (9th Cir. 1999).
158. The remaining second factor-the nature of the work-is less relevant to most fair use analyses and will most often be either neutral or against per-sonal use, as it is intended to weaken fair use defenses when they involve non-factual creative works. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 586 (1994) (noting that the second factor is "not much help" when considering transformative uses);
159. Blanch v. Koons, 467 F.3d 244, 257 (2d Cir. 2006) (find-ing that the second factor has limited weight when the use is transformative);
160. Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 803 (9th Cir. 2003) (stating that the second fair use factor "typically has not been terribly signifi-cant in the overall fair use balancing"
161. quoting Dr. Seuss Enters. v. Penguin Books USA, Inc., 109 F.3d 1394, 1402 (9th Cir. 1997).
162. Concern over this uncertainty has led Gideon Parchomovsky and Phil-ip J. Weiser to suggest an approach that would supplement fair use doctrine with legislatively nudged and privately developed user privileges to make use of digital media. See Gideon Parchomovsky & Philip J. Weiser, Beyond Fair Use, 96 CORNELL L. REV. 91, 95-97 (2010). We agree that a set of defined user privileges would lend consumers much needed clarity. But as outlined below, we believe those privileges already exist in the common law of copyright exhaustion.
163. LAWRENCE LESSIG, FREE CULTURE: HOW BIG MEDIA USES TECHNOL-OGY AND THE LAW TO LOCK DOWN CULTURE AND CONTROL CREATIVITY 187 (2004).
164. See Michael J. Madison, A Pattern-Oriented Approach to Fair Use, 45 WM. & MARY L. REV. 1525, 1687 (2004);
165. See Sony, 464 U.S. at 443-55 (establishing rules for manufacturing time shifting technologies);
166. Kelly, 336 F.3d at 818-22 (establishing rules for fair use information location tools);
167. Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1521-28 (9th Cir. 1992) (establishing rules for fair use competitive reverse engineering).
168. See Code of Best Practices in Fair Use for Academic and Research Li-braries, ASS'N OF RESEARCH LIBRARIES ET AL. (Jan. 2012), http://www. centerforsocialmedia.org/fair-use/best-practices.
169. Michael Grynberg, Property Is a Two-Way Street: Personal Copy-right Use and Implied Authorization, 79 FORDHAM L. REV. 435, 451 (2010);
170. See 2 WILLIAM F. PATRY, PATRY ON COPYRIGHT § 5:131 (2011).
171. See Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558-59 (9th Cir. 1990)
172. citing 3 MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON COPY-RIGHT § 10.03(A)(7), at 10-53 (rev. ed. 2011).
173. See De Forest Radio Tel. Co. v. United States, 273 U.S. 236, 241 (1927).
174. See Bourne v. Walt Disney Co., 68 F.3d 621, 631 (2d Cir. 1995).
175. See SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharm., Inc., 211 F.3d 21, 25 (2d Cir. 2000) (noting that implied licenses are found only in narrow circumstances);
176. see also Capitol Records, Inc. v. MP3tunes, LLC, No. 07 Civ. 9931(WHP), 2011 WL 5104616, at *16 (S.D.N.Y. Oct. 25, 2011) (rejecting implied license theory as a basis for finding personal copies of music on cloud computing server to be noninfringing).
177. There are a few exceptions. See, e.g., Straus v. Victor Talking Mach. Co., 243 U.S. 490, 501 (1917) (rejecting attempted use of a license notice at-tached to patented machines as a means of restricting alienation).
178. But see Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 350 (1908) (rejecting labels as re-strictions in general);
179. accord UMG Recordings, Inc. v. Augusto, 628 F.3d 1175, 1182 (9th Cir. 2011).
180. See, e.g., Wall Data Inc. v. L.A. Cnty. Sheriff's Dep't, 447 F.3d 769, 779 (9th Cir. 2006).
181. iTunes Terms and Conditions, APPLE (Oct. 12, 2011), http://www.apple.com/ legal/itunes/us/ terms.html.
182. citing Berg v. Symons, 393 F. Supp. 2d 525, 543 (S.D. Tex. 2005) ("Absent any consideration, an implied license is revoked when the plaintiff files an infringement suit.");
183. But see Carson v. Dynegy, Inc., 344 F.3d 446, 451-52 (5th Cir. 2003);
184. Lulirama Ltd., Inc. v. Axcess Broad. Servs., Inc., 128 F.3d 872, 882 (5th Cir. 1997)
185. For example, in Sony, the Supreme Court held that using a VCR to personally time-shift television programs was a fair use, in part because a substantial number of copyright owners did not object to the practice. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 456 (1984).
186. Howev-er, immediately after the decision, several copyright owners who were part of the nonobjector group came forward and reversed their position. Petition for Rehearing at 2, Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984) (No. 81-1687), available at https://w2.eff.org/legal/cases/ beta-max/betamax-petition-rehearing.pdf.
187. Had the court premised its holding on an implied license theory, this could have shifted the result significantly. See also Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 637 (2007) ("LGE points out that the License Agreement specifically disclaimed any license to third parties to practice the patents by combining licensed products with other components. . . . But the question whether third parties received implied li-censes is irrelevant because Quanta asserts its right to practice the patents based not on implied license but on exhaustion. And exhaustion turns only on Intel's own license to sell products practicing the LGE Patents.").
188. See Sony, 464 U.S. at 476;
189. see also Orit Fischman Afori, Implied Li-cense: An Emerging New Standard in Copyright Law, 25 SANTA CLARA COM-PUTER & HIGH TECH. L.J. 275, 324-25 (2009).
190. See About Us, RECORD STORE DAY (last visited Mar. 1, 2012), http://www.recordstoreday.com/CustomPage/614.
191. Although not identified among the four statutory factors, courts have found at least four ways to shoehorn copy ownership into the fair use analysis. Most commonly, courts consider the means by which a copy was acquired un-der the first fair use factor on the theory that "the propriety of the defendant's conduct" is relevant to the character of her use. See Haberman v. Hustler Magazine, Inc., 626 F. Supp. 201, 211 (D. Mass. 1986) (noting that "[c]opies of the postcards were placed on sale by Haberman and fairly acquired by Hus-tler");
192. see also Nuñez v. Caribbean Int'l News Corp., 235 F.3d 18, 23 (1st Cir. 2000) (noting under the first factor that "El Vocero obtained each of the photo-graphs lawfully. An unlawful acquisition of the copyrighted work generally weighs against a finding of fair use; no such theft occurred here");
193. Lish v. Har-per's Magazine Found., 807 F. Supp. 1090, 1097 (S.D.N.Y. 1992) (noting under the first factor that "it does not appear that the Letter was obtained in bad faith since . . . the Letter was sent by Lish to the source, who was free to deliv-er it to Harper's").
194. Copy ownership can also come into play under the second fair use factor in cases alleging infringement of unpublished works. See Harper & Row, Pub-lishers, Inc. v. Nation Enters., 471 U.S. 539, 542-43 (1985) (holding that the publication of excerpts from a "purloined manuscript . . . secretly brought" by "an unidentified person" to the Nation's editor, who "knew that his possession of the manuscript was not authorized and that the manuscript must be re-turned quickly to his 'source' to avoid discovery" was not fair).
195. Courts sometimes consider copy ownership as an additional factor outside of the statutory framework. See Maxtone-Graham v. Burtchaell, 803 F.2d 1253, 1264 (2d Cir. 1986) (noting, in its consideration of bad faith as a nonstatutory factor, the fact that defendant "obtained Pregnant by Mistake through legitimate channels");
196. see also Haberman, 626 F. Supp. at 214 (noting that "[t]he four statutory factors are not the only issues to be considered" and reiterating "that the pieces reproduced were fairly acquired by Hustler").
197. In still other cases, courts make a point of highlighting the lawful acquisi-tion of the copies in question, but decline to connect those facts to any particu-lar element of the fair use defense. See, e.g., Video-Cinema Films, Inc. v. Cable News Network, Inc., Nos. 98 Civ. 7128(BSJ), 98 Civ. 7129(BSJ), 98 Civ. 7130(BSJ), 2001 WL 1518264, at *2-4 (S.D.N.Y. Nov. 28, 2001). There the court held that broadcasters who aired footage from Robert Mitchum's 1945 film G.I. Joe in televised obituaries were likely protected under fair use.
198. See, e.g., Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990);
199. Berg v. Symons, 393 F. Supp. 2d 525, 544 (S.D. Tex. 2005).
200. Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1514-15 (9th Cir. 1992).
201. Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832, 847 (Fed. Cir. 1992).
202. While both of these cases address reverse engineering by commercial actors, rather than personal uses in any strict understanding of the term, the underlying acts of reproduction could be readily extended to a number of per-sonal use scenarios. See Corynne McSherry & Marcia Hofmann, Sony v. Hotz: Sony Sends a Dangerous Message to Researchers-and Its Customers, ELEC. FRONTIER FOUND. (Jan. 19, 2011), https://www.eff.org/deeplinks/2011/01/sony -v-hotz-sony-sends-dangerous-message (describing a case in which individual owners of PlayStation 3 consoles managed to reverse engineer the keys to un-lock their machines so they could develop and play their own homebrew games on them).
203. Sega, 977 F.2d at 1527.
204. Pamela Samuelson & Suzanne Scotchmer, The Law and Economics of Reverse Engineering, 111 YALE L.J. 1575, 1610-13 (2002).
205. Sega, 977 F.2d at 1524 n.7.
206. Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832, 8470 (Fed. Cir. 1992).
207. 17 U.S.C. § 407 (2006).
208. 37 C.F.R. § 201.2(d)(2) (2011).
209. Atari, 975 F.2d at 836.
210. See also DSMC, Inc. v. Convera Corp., 479 F. Supp. 2d 68, 83 (D.D.C. 2007) (holding that defendant's use was unfair where it gained unlawful ac-cess to plaintiff's program).
211. Atari, 975 F.2d at 843.
212. See Harper & Row Publishers, Inc. v. Nation Enter., 471 U.S. 539, 562-63 (1985).
213. See Salinger v. Random House, 811 F.2d 90, 97 (2d Cir. 1987).
214. Lewis Galoob Toys, Inc. v. Nintendo of Am., Inc., 780 F. Supp. 1283, 1288 (N.D. Cal. 1991)
215. aff'd, 964 F.2d 965 (9th Cir. 1992).
216. see also Recording Indus. v. Diamond Multimedia Sys., 180 F.3d at 1079 (describing the operation of an early mp3 player that "merely makes copies in order to render portable, or 'space-shift,' those files that already re-side on a user's hard drive" as "paradigmatic noncommercial personal use").
217. Lewis Galoob Toys, 780 F. Supp. at 1291.
218. 964 F.2d 965, 971 (9th Cir. 1992);
219. accord Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 638 (2008) (holding that the doctrine of patent ex-haustion prevents patent holders from attempting to "control post-sale use of the [patented] article").
220. See, e.g., Chamberlain Grp., Inc. v. Skylink Tech., Inc., 292 F. Supp. 2d 1023 (N.D. Ill. 2003) (finding that authorized use of technology does not vio-late Digital Millenium Copyright Act)
221. aff'd, 381 F.3d 1178 (Fed. Cir. 2004).
222. For a more thorough discussion of the interaction between 17 U.S.C. § 1201
223. Rolling Code technology is often used in garage-door openers and car entry systems. It is designed to prevent a person from recording a transmis-sion and replaying it to break in to the garage or car. See Rolling Code, WIKIPEDIA, http://en.wikipedia.org/wiki/Rolling-code (last visited Mar. 3, 2012).
224. Chamberlain, 292 F. Supp. 2d at 1039.
225. see also Storage Tech. Corp. v. Custom Hardware Eng'g & Consult-ing, Inc., 421 F.3d 1307 (Fed. Cir. 2005)
226. finding that purchase of magnetic li-brary-tape system implicates copy ownership under 17 U.S.C. § 117;
227. Lexmark Int'l, Inc. v. Static Control Components, Inc., 387 F.3d 522, 546 (6th Cir. 2004) (finding that purchase and ownership of printer was key to lawful access to printer-engine program contained inside).
228. See Dan Simon, A Third View of the Black Box: Cognitive Coherence in Legal Decision Making, 71 U. CHI. L. REV. 511, 513 (2004) ("Coherence-based reasoning posits that the mind shuns cognitively complex and difficult decision tasks by reconstructing them into easy ones, yielding strong, confident conclusions.").
229. See, e.g., Pierson v. Post, 3 Cai. 175 (N.Y. 1805).
230. See, e.g., Vernor v. Autodesk, Inc., 621 F.3d 1102, 1112-13 (9th Cir. 2010) (finding a software's use subject to its copyright holder's numerous limitations).
231. As one commentator puts it, "the powers wielded by copyright holders come only at the expense of the property rights the rest of us hold in our per-sons, estates, and chattels." Tom W. Bell, Copyright as Intellectual
232. 17 U.S.C. § 109(c) (2006) (permitting the owner of a particular copy of a work to publicly display that work "to viewers present at the place where the copy is located");
233. See David Fagundes, Property Rhetoric and the Public Domain, 94 MINN. L. REV. 652, 675-76 (2010).
234. For example, Jack Valenti, former presi-dent of the Motion Picture Association of America, railed against "private property['s] . . . being pillaged." Edmund Sanders & Jube Shiver, Jr., Digital TV Copyright Concerns Tentatively Resolved by Group, L.A. TIMES, Apr. 26, 2002, at C5.
235. Members of Congress often defend new expansions of rights-holder exclusivity as necessary to protect property interests. See, e.g., 144 CONG. REC. H10620 (daily ed. Oct. 12, 1998) (statement of Rep. Jackson Lee) ("[The Digital Millennium Copyright Act] demonstrates our commitment to protecting the personal rights and property of American citizens.");
236. 144 CONG. REC. S12378 (daily ed. Oct. 12, 1998) (statement of Sen. Hatch) ("In my view, property is property whether it's dirt or intangible . . . . ").
237. Courts lapse into these charac-terizations as well. See Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 961 (2005) (Breyer, J., concurring) ("[D]eliberate unlawful copy-ing is no less an unlawful taking of property than garden-variety theft.");
238. noting Justice Scalia's invocation of property romanticism during oral argument in eBay, Inc. v. MercExchange, LLC, 547 U.S. 388 (2006).
239. See Aaron K. Perzanowski, In Defense of Intellectual Property Anxiety: A Response to Professor Fagundes, 94 MINN. L. REV. HEADNOTES 85, 87-89 (2010).
240. This goal is an instrumental one. See Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975) ("The immediate effect of our copyright law is to secure a fair return for an 'author's' creative labor. But the ultimate aim is, by this incentive, to stimulate [the creation of useful works] for the general public good.");
241. Mazer v. Stein, 347 U.S. 201, 219 (1954) ("The economic philos-ophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and in-ventors in 'Science and useful Arts.'"). Not only does the copyright system as-pire to the creation of new works, but also their use and enjoyment by the pub-lic.
242. But not all authors. See Eric E. Johnson, Intellectual Property and the Incentive Fallacy, FLA. ST. U. L. REV. (forthcoming 2012).
243. See Harper & Row Publishers, Inc. v. Nation Enter., 471 U.S. 539, 558 (1985), ("The Framers intended copyright itself to be the engine of free expres-sion. By establishing a marketable right to the use of one's expression, copy-right supplies the economic incentive to create and disseminate ideas.").
244. Glynn S. Lunney, Jr., Fair Use and Market Failure: Sony Revisited, 82 B.U. L. REV. 975, 1026 (2002) ("To the extent that private copying expands access to existing works without decreasing the copy-right owner's revenues and the resulting incentive to create additional works, private copying is Pareto optimal and should constitute a fair use.").
245. See William W. Fisher III, Property and Contract on the Internet, 73 CHI.-KENT L. REV. 1203, 1249 (1998) (arguing that copyright should "give cre-ators enough entitlements to induce them to produce the works from which we all benefit but no more").
246. See 17 U.S.C. § 109(a) (2006) ("[N]otwithstanding the provisions of § 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the au-thority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.").
247. 210 U.S. 339 (1908). Bobbs-Merrill considered an effort to inflate retail prices for copies of The Castaway, a novel by Hallie Herminie Rives, by inclu-sion of a notice stating that "[t]he price of this book at retail is one dollar net. No dealer is licensed to sell it at a less price, and a sale at a less price will be treated as an infringement of the copyright."
248. Copyright Act of 1909, ch. 320, § 26, 35 Stat. 1075, 1084 (repealed 1976) (stating that "nothing in this Act shall be deemed to forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been lawfully obtained"). When it embraced Bobbs-Merrill, Congress did "not intend[] to change in any way existing law."
249. H.R. REP. NO. 60-2222, at 19 (1909)
250. reprinted in E. FULTON BRYLAWSKI & ABE GOLDMAN, 6 LEGISLATIVE HISTORY OF THE 1909 COPYRIGHT ACT (1976).
251. See 17 U.S.C. § 109(a). Again, Congress affirmed its intent to "re-state[] and confirm[]" the first sale rule "established by [] court decisions."
252. H.R. REP. NO. 94-1476, at 79 (1976).
253. See Zechariah Chafee, Jr., The Music Goes Round and Round: Equita-ble Servitudes and Chattels, 69 HARV. L. REV. 1250, 1261 (1956);
254. 210 U.S. at 343.
255. 17 U.S.C. § 106(3).
256. See, e.g., Fawcett Publ'ns, Inc. v. Elliot Publ'g Co., 46 F. Supp. 717, 718 (S.D.N.Y. 1942).
257. See Doan v. Am. Book Co., 105 F. 772, 777 (7th Cir. 1901) (holding that overhauling and reconstructing copies of a protected work was not in-fringement);
258. Bureau of Nat'l Literature v. Sells, 211 F. 379, 382 (W.D. Wash. 1914) (same).
259. Doan, 105 F. at 777.
260. See Kipling v. G.P. Putnam's Sons, 120 F. 631, 633-34 (2d Cir. 1903);
261. Fawcett Publ'ns, 46 F. Supp. at 718 (holding that no infringement occurred when one publisher purchased copies of another publisher's comic books and bound them together with comics published by a competitor under the name "Double Comics").
262. 120 F. at 632-33.
263. see also Quanta Computer v. LG Elecs., 553 U.S. 617, 630 (2008) (noting the "longstanding principle that, when a patented item is 'once lawfully made and sold, there is no restriction on [its] use to be implied for the benefit of the patentee'"
264. quoting Adams v. Burke, 84 U.S. (17 Wall.) 453, 456-57 (1873).
265. Congress adopted similar reasoning with respect to backup and neces-sary step copies of computer programs. See 17 U.S.C. § 117(b) (2006).
266. This issue has recently arisen in the patent-exhaustion context. In the aftermath of the Supreme Court's doctrinal affirmation of exhaustion, see Quanta, 553 U.S. at 637
267. the Federal Circuit confronted the question of how to apply the principle to patented seeds in Monsanto Co. v. Bowman, 657 F.3d 1341 (Fed. Cir. 2011). There, the Court denied the defendant's claim that pur-chase of a patented seed exhausted all claims to future seeds grown from replanting the original.
268. quoting Monsanto Co. v. Scruggs, 459 F.3d 1328, 1336 (Fed. Cir. 2011). Without any clear limitation to enforce some balance of rivalry, exhaustion can potentially undermine rights holders' entire claim to exclusivity, the proverbial exception swallowing the rule. Tethering exhaus-tion to ongoing copy ownership and to rules that replicate and balance the rivalrous nature of personal property ensure the stability of the rule.
269. As the 1976 Act clarified, only lawfully made copies trigger copyright exhaustion. 17 U.S.C. § 109(a) (2006).
270. See, e.g., Jon Healey, Editorial, Ultraviolet on eBay? No Big Deal, L.A. TIMES (Oct. 25, 2011), http://latimesblogs.latimes.com/technology/2011/10/ ultraviolet-on-ebay-no-big-deal.html;
271. see also Greg Sandoval, EMI Sues MP3 Reseller ReDigi, CNET NEWS (Jan. 6, 2012), news.cnet.com/ 8301-31001-3-57354089-261/emi-sues-mp3-reseller-redigi/.
272. See Capitol Records, Inc. v. MP3tunes, LLC, No. 07 Civ. 9931 (WHP), 2011 WL 5104616, at *6-7 (S.D.N.Y. Oct. 25, 2011) (drawing distinctions be-tween "blatant infringers" that upload content to the internet for the world to experience and those who store content in online lockers for personal use).
273. This assumes the end user is the party engaged in any act of direct infringement. See Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 130-33 (2d Cir. 2008);
274. Costar Grp. v. LoopNet, Inc., 373 F.3d 544, 552-55 (4th Cir. 2004).
275. Sony v. Universal City Studios, 464 U.S. 417, 456 (1984);
276. Paramount Pictures v. ReplayTV, 298 F. Supp. 2d 921, 928-29 (C.D. Cal. 2004);
277. UMG Re-cordings, Inc. v. MP3.com, Inc., 92 F. Supp. 2d 349, 352-53 (S.D.N.Y. 2000).
278. 17 U.S.C. § 1201 (2006).
279. See Storage Tech. v. Custom Hardware Eng'g & Consulting, Inc., 421 F.3d 1307, 1319 (Fed. Cir. 2005);
280. Chamberlain Grp., Inc. v. Skylink Tech., Inc., 292 F. Supp. 2d 1040, 1044 (N.D. Ill. 2003)
281. aff'd, 381 F.3d 1178 (Fed. Cir. 2004).
282. See MDY Indus. v. Blizzard Entm't, Inc., 629 F.3d 928, 950 (9th Cir. 2010).
283. See generally Symposium, Exhaustion and First Sale in Intellectual Property, 51 SANTA CLARA L. REV. 1055 (2011).
284. Bloomer v. McQuewan, 55 U.S. (1 How.) 539 (1852);
285. see Quanta Com-puter, Inc. v. LG Elecs., Inc., 553 U.S. 617 (2008) .
286. See Sebastian Int'l, Inc. v. Longs Drug 5 Stores Corp., 53 F.3d 1073, 1076 (9th Cir. 1995) ("When a purchaser resells a trademarked article under the producer's trademark, and nothing more, there is no actionable misrepre-sentation under the statute.").
287. See Allison v. Vintage Sports Plaques, 136 F.3d 1143, 1149 (11th Cir. 1998) (concluding that the "first-sale doctrine applies to limit the right of pub-licity under Alabama law . . . .").
288. Dow Jones & Co. v. Int'l Secs. Exch., Inc., 451 F.3d 295, 297, 302-03 (2d Cir. 2006) (holding that an options exchange that tracks a proprietary market index does not misappropriate the rights of the index's creator).
289. 17 U.S.C. § 1201(a)(1)(A) (2006) ("No person shall circumvent a tech-nological measure that effectively controls access to a work protected under this title.").
290. see also MDY Indus., LLC v. Blizzard Entm't., 629 F.3d at 928, 953 n.16 (9th Cir. 2010) (noting that § 1201(a) prohibits only unauthorized cir-cumvention, and § 1201 claimants bear the burden of proving that the alleged circumvention occurred without authority).
291. H.R. REP. NO. 105-551, pt. 1, at 17 (1998);
292. see also S. REP. NO. 105-190, at 11 (1998) (likening § 1201(a) to "making it illegal to break into a house").
293. H.R. REP. NO. 105-551, pt. 1, at 17-18 (1998).
294. See, e.g., Chamberlain Grp. v. Skylink Techs., Inc., 381 F.2d 1178, 1203 (Fed. Cir. 2004) (worrying that reading the DMCA as recognizing new property rights would require resolution of public policy issues more appropri-ately left to Congress).
295. See, e.g., Walt Disney Prods. v. Basmajian, 600 F. Supp. 439, 442 (S.D.N.Y. 1984) (holding that a lawful possessor of animation cell gifted by a Disney employee was entitled to assert the first sale defense).
296. See, e.g., generally Brian W. Carver, Why License Agreements Do Not Control Copy Ownership: First Sales and Essential Copies, 25 BERKELEY TECH. L.J. 1887, 1925-30 (2010) (noting uncertainty in the question of copy-right licenses versus sales, even within circuits comparing the divergent ap-proaches to the question of licenses versus sales within the Ninth Circuit).
297. Both cases were argued before Judges Callahan, Canby, and Ikuta on June 7, 2010. See UMG Recordings Inc. v. Augusto, 628 F.3d 1175 (9th Cir. 2011);
298. Vernor v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010).
299. Augusto, 628 F.3d at 1177-78.
300. This is consistent with the Second Circuit's conclusion in Krause v. Titleserv, Inc., 402 F.3d 119, 124 (2d Cir. 2005) (holding that in order to determine ownership of a computer program, "formal title" is not required and that "courts should inquire into whether the party exercises sufficient incidents of ownership.").
301. See Vernor, 621 F.3d at 1104 (describing Autodesk's software license agreement as attempting to limit the customer's rights to that of a "nonexclu-sive and nontransferable license").
302. See United States v. Wise, 550 F.2d 1180, 1187 (9th Cir. 1977) ("[T]he exclusive right to vend the transferred copy rests with the vendee, who is not restricted by statute from further transfers of that copy, even though in breach of an agreement restricting its sale.").
303. More recently, the Ninth Circuit followed Vernor in rejecting the copy-right misuse argument raised by Psystar, a company that produced computers interoperable with Apple's copyrighted operating system. See Apple v. Psystar Corp., 658 F.3d 1150, 1155-56, 1159 (9th Cir. 2011) (citing Vernor and holding that Apple did not misuse its copyright because the software buyers merely "purchased the disc," and thus "were licensees, not owners, of the software").
304. See UMG Recordings, Inc. v. Augusto, 628 F.3d at 1175, 1177-78 (9th Cir. 2010) (quoting UMG's licensing statement).
305. See Vernor, 621 F.3d at 1104 (observing that return of Autodesk's software is the customer's choice).
306. See Augusto, 628 F.3d at 1183 (noting that the Vernor "formula-tion . . . applies in terms to software users").
307. See, e.g., Krause v. Titleserv, Inc., 402 F.3d 119, 124 (2d Cir. 2005) (finding that the § 117 ownership requirement was satisfied applied despite the efforts of the copyright holder's efforts to impose limitations on the use and modification of its software).
308. See John Rothchild, The Incredible Shrinking First Sale Rule: Are Software Resale Limits Lawful?, 57 RUTGERS L. REV. 1, 19 (2004) (describing "the ordinary understanding of ownership"). We embrace an understanding of possession that would include digital information stored remotely at the direc-tion of a consumer. For example, a consumer who purchases an MP3 from Amazon and stores that file exclusively on her Cloud Drive would be consid-ered in possession of that file.
309. 17 U.S.C. § 106(3) (2006) (stating that "the owner of copyright . . . has the exclusive rights . . . to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending . . . .");
310. See, e.g., MDY Indus. v. Blizzard Entm't, Inc., 629 F.3d 928 (9th Cir. 2010) (holding that software users who violated the terms of a copyrighted software's terms of use are not infringers because those terms are contractual covenants not "copyright-enforceable conditions"). We take no position here on the viability of such claims as a matter of contract law, nor do we consider the question of preemption of such claims.
311. 17 U.S.C. § 202 (2006).
312. See Carol Vogel, Bidding War for a Warhol Breaks Out at Christie's, N.Y. TIMES, May 12, 2011, at A22 (reporting the results of a recent art auction at Christie's).
313. 17 U.S.C. § 202 (2006).
314. See Pope v. Curl, (1741) 26 Eng. Rep. 608;
315. 2 Atk. 342 (holding that ownership of physical received letters did not confer the right to re-print and publish them);
316. See Stephens v. Cady, 55 U.S. (1 How.) 528, 531 (1852) (noting that copyright is "detached from the manuscript, or any other physical existence, and will not pass with the manuscript unless included by express words in the transfer.").
317. See, e.g., Pushman v. N.Y. Graphic Soc'y, Inc., 39 N.E.2d 249 (1942) (holding that the copyright of an original work of art accompanied physical transfer of the work);
318. see also H.R. Rep. No. 94-1476, at 124 (1976)
319. reprinted in 1976 U.S.C.C.A.N. at 5659, 5664-5740 (noting Congress's intent to alter the common law rule applied in Pushman).
320. See H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. at 124 (1976)
321. reprint-ed in U.S.C.C.A.N. 5659, 5739-5740 (rejecting the rule applied in Pushman and emphasizing that 202 serves to sever copyright ownership from ownership of the object in which the work is embodied).
322. See 17 U.S.C. § 101 (defining "transfer of copyright ownership" as "an assignment, mortgage, exclusive license, or any other conveyance . . . of a cop-yright or of any of the exclusive rights comprised in a copyright . . . .");
323. See, e.g., Mattel, Inc. v. Pitt, 229 F. Supp. 2d 315, 321-25 (S.D.N.Y. 2002) (analyzing the creation of an "S&M Barbie" from a lawfully purchased Mattel doll under fair use).
324. See Am. Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir. 1994) (holding that archival photocopies of multiple journal articles available for use by employee researchers was not fair use).
325. Compare Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 561 (1985) (copying the "heart" of a work in order to write a review can infringe)
326. Castle Rock Entm't, Inc. v. Carol Publ'g Grp., 150 F.3d 132, 143 (2d Cir. 1998) (concluding that a Seinfeld-themed SAT prep book may have qualified as a derivative work because it was insufficiently transformative)
327. Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341, 1343 (9th Cir. 1988) (holding that the preparation and sale of ceramic tiles bearing cop-ies of the copyrighted image of the Lone Ranger constituted derivative works)
328. Warner Bros. Entm't, Inc. v. RDR Books, 575 F. Supp. 2d 513, 539 (S.D.N.Y. 2008) (holding that a Harry Potter reference guide, which signifi-cantly condensed, synthesized, and re-organized the original material, was not a derivative work).
329. See Princeton Univ. Press v. Mich. Document Servs., 99 F.3d 1381, 1383 (6th Cir. 1996) (holding that photocopying and selling to students "sub-stantial segments of copyrighted scholarship" was not fair use);
330. Basic Books, Inc. v. Kinko's Graphics Corp., 758 F. Supp. 1522, 1526 (S.D.N.Y. 1991) (same).
331. See United States v. Univis Lens Co., Inc., 316 U.S. 241, 250-51 (1942) (applying the doctrine of exhaustion to patent law and holding that "the purpose of the patent law is fulfilled . . . when the patentee has received his reward for the use of his invention. . . . and . . . [o]nce that purpose is realized the patent law affords no basis for restraining the use and enjoyment of the thing sold.").
332. Compare Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341, 1343 (9th Cir. 1988) (holding that the preparation and sale of ceramic tiles bearing copies of the copyrighted image of the Lone Ranger constituted derivative works)
333. Mirage Editions, Inc. v. Albuquerque ART Co., 856 F. 2d 1341 (9th Cir. 1988)
334. with Lee v. A.R.T. Co., 125 F.3d 580, 582-583 (7th Cir. 1997) (declining to follow Mirage Editions because placing an image upon a tile does not fall within the scope of the statutory language of "reproduction" or "recast, transformed, or adapted")
335. quoting 17 U.S.C. § 101 (2006).
336. See 17 U.S.C. § 107(1) (2006) (directing that courts should consider "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.").
337. But see Marcus v. Rowley, 695 F.2d 1171, 1178-79 (9th Cir. 1983) (holding that a teacher's copying of booklet for classroom educational purposes was not a fair use);
338. En-cyclopaedia Britannica Educ. Corp. v. C.N. Crooks, 58 F. Supp. 1247, 1251 (W.D.N.Y. 1983) (making and distributing off-air videotapes of educational programs and distributing them to schools is not a fair use).
339. See Nanette Asimov, Students Argue Some Online Fees Aren't Allowed, S.F. CHRON., June 3, 2011, at A1 ("'Why can't I download the site [content] on-to my computer and keep it there forever for my personal use?' asked student Fred Rassaii, who filed a grievance.");
340. Brian Burnsed, Customize and Digitize Your College Education: New Digital Textbook Services Could Transform How Course Materials are Delivered to Students, U.S. NEWS & WORLD REP., (Apr. 25, 2011), http://www.usnews.com/ education/best-colleges/articles/2011/04/25/customize-and-digitize-your-college- education (describing a service that allows university professors to create their own compilation of original source mate-rials that have "automatic copyright clearance").
341. See Princeton Univ. Press v. Mich. Document Servs., 99 F.3d 1381 (6th Cir. 1996);
342. Am. Geophysical Union v. Texaco, 60 F.3d 913 (2d Cir. 1994);
343. Basic Books, Inc. v. Kinko's Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991).
344. In re Aimster Copyright Litig., 334 F.3d 643, 652 (7th Cir. 2003) (ob-serving the possibility of noninfringing uses of a program that provides for the transfer of digital music files between service subscribers);
345. Sony Computer Entm't, Inc. v. Connectix Corp., 203 F.3d 596, 607 (9th Cir. 2000) (stating that creating a product that allows software to be played on a platform that the software was not intended to be compatible with is a legitimate purpose under fair use);
346. Recording Indus. Assoc. of Am. v. Diamond Multimedia Sys., 180 F.3d 1072, 1079 (9th Cir. 1999)
347. stating that personal use space shifting of dig-ital music files is entirely consistent with the Audio Home Recording Act, 17 U.S.C. § 1001 (2006).
348. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994) (asking whether a new work is sufficiently transformative).
349. See, e.g., A Spotter's Guide to XCP and SunnComm's MediaMax, ELEC. FRONTIER FOUND., https://w2.eff.org/IP/DRM/Sony-BMG/guide.php (last visited Apr. 28, 2012) (noting restrictive labels on CDs).
350. See, e.g., Kipling v. G.P. Putnam's Sons, 120 F. 631 (2d Cir. 1903) (holding that the owners of various copyrighted writings were permitted to bind the writings along with other unprotected pieces into a single volume and sell the final product).
351. See also, e.g., Fawcett Publ'ns, Inc. v. Elliot Publ'g Co., 46 F. Supp. 717, 718 (S.D.N.Y. 1942) (allowing the rebinding and revending of publications because the copyrighted material was not duplicated but only resold).
352. Of course, to the extent consumers use digital lockers or other storage locations to facilitate access to their files by the public at large, such use may well fall outside the scope of the exhaustion doctrine. See Capitol Records, Inc. v. MP3Tunes, LLC, 2011 WL 5104616, at *17 (S.D.N.Y. 2011) (finding a digital storage service provider liable as a contributing infringer for using illegally stored files to facilitate broader access to those illegal copies).
353. See also 1DollarScan Will Scan Your Paper Books, Cheap, L.A. TIMES BLOG, http://latimesblogs.latimes.com/technology/2011/08/digital-book-scanning.html.
354. Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 131-32 (2d. Cir. 2008) (emphasizing that service providers who merely make available to customers a system that allows the customers to make copies lacks the voli-tional element of direct liability)
355. CoStar Grp, Inc. v. Loopnet, Inc., 373 F.3d 544, 550 (4th Cir. 2004) (requiring "actual infringing conduct" on behalf of the service provider, which indicates "that the machine owner himself [and not the consumer] trespassed on the exclusive domain of the copyright owner.");
356. Reli-gious Tech. Ctr. v. Netcom On-Line Commc'n Servs., Inc., 923 F. Supp. 1231 (N.D. Cal. 1995);
357. A&M Records, Inc. v. Napster, Inc. 239 239 F. Supp. 3d 1004, 1021 (9th Cir. 2001) (concluding that maintaining a system that allows users to infringe does not-in itself-expose the service provider to copyright liability).
358. See Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, 545 U.S. 913, 941 (2004) (finding that the service provider intended to profit from its users in-fringements);
359. A&M v. Napster, 239 F. 3d at 1022 (concluding that Napster had knowledge of infringing uses and failed to take remedial or preventative measures)1004;
360. In re Aimster Copyright Litig., 334 F.3d 643, 653 (7th Cir. 2003);
361. Viacom Int'l Inc. v. YouTube, Inc., 718 F. Supp. 2d 514 (S.D.N.Y. 2010);
362. see also 17 U.S.C. § 512(c) (2006) (providing safe harbors for any infringing uses made by reason of storage at the direction of a user of an online service provider).
363. See e.g., In re Aimster, 334 F.3d at 653 (concluding that Aimster was likely to fail at trail because it could not produce evidence that its services were ever used for noninfringing purposes).
364. See UMG Recordings, Inc. v. MP3.com, Inc., 92 F. Supp. 2d at 349, 350 (S.D.N.Y. 2000) (emphasizing that copyright must operate to protect the "copyrightholder's property interests").
365. One new company, ReDigi, appears to have fully embraced this ap-proach, arguing that it can rely on copyright exhaustion to buy and resell digital music on behalf of users via a cloud-computing infrastructure. See ReDigi Frequently Asked Questions, REDIGI, https://www.redigi.com/education.html ("Is ReDigi Legal?") (last visited Mar. 5, 2012).
366. However, this has not deterred Capitol Records from suing ReDigi, and arguing that exhaustion does not ap-ply where the actual object re-sold-in this case a music file-is a copy of the original and asking a court to preliminarily enjoin its operations pending final disposition of the case. See Greg Sandoval, EMI Sues MP3 Reseller ReDigi, CNET NEWS (Jan. 6, 2012, 12:38 PM), http://news.cnet.com/8301-31001-3 -57354089-261/emi-sues-mp3-reseller-redigi/.
367. See LIBRARY OF CONGRESS, EXEMPTION TO PROHIBITION ON CIRCUM-VENTION OF COPYRIGHT PROTECTION SYSTEMS FOR ACCESS CONTROL TECH-NOLOGIES, at 43828, http://www.copyright.gov/fedreg/2010/75fr43825.pdf.
368. Ex-emption to Prohibition on Circumvention of Copyright Protection Systems for Access control Technologies, 75 Fed. Reg. 43,825, 43,828 (Jul. 27, 2010)
369. to be codified at 37 C.F.R. pt. 201 ("The Electronic Frontier Foundation (EFF) pro-posed a class that would allow circumvention of the technological measures contained on certain wireless phone handsets (known as 'smartphones') that prevent third-party software applications from being installed and run on such phones. This circumvention activity is colloquially referred to as 'jailbreaking' a phone.").
370. See Erica Sadun, The Story Behind Cydia on the iPhone, ARS TECHNICA (Oct. 8, 2008, 1:59 PM), http//www.arstechnica.com/apple/news/ 2008/10/the-story- behind-cydia-on-the-iphone.ars;
371. David Kravets, U.S. Declares iPhone Jailbreaking Legal, Over Apple's Objections, WIREDTHREAT LEVEL (Jul. 26, 2010, 11:47 PM), http://www.wired.com/ threatlevel/2010/07/feds-ok-iphone-jailbreaking/(reporting EFF's petition and Apple's response).
372. 17 U.S.C. § 1201(a)(1), (a)(3)(A) (2006).
373. Quanta Computer, Inc. v. LG Elecs., Inc., 553 U.S. 617, 626 (2008);
374. See Universal City Studios, Inc. v. Corley, 273 F.3d 429, 444 (2d Cir. 2001) (acknowledging the defense of implied authority but finding no evidence to support it in the instant case).
375. While some courts have considered authori-zation in the context of fair use and § 109, none have considered the effect of sales of protected works under a common law exhaustion analysis. See, e.g., 321 Studios v. Metro Goldwyn Mayer Studios, Inc., 307 F. Supp. 2d 1085, 1099 (N.D. Cal. 2004) (holding that 321's DVD copying software violated the DMCA and was not a fair use).