The Internet offers a means to create, copy and distribute copyrighted works of a quality and in a volume that was simply unknown before the World Wide Web was developed. A single Web page can be viewed by any of the millions of people with Internet access anywhere around the world, and "viewed" in terms of the Internet necessarily means "copied." This presents a problem when considered in the light of the First-Sale doctrine, which is part and parcel of § 109 of the Copyright Act. The doctrine allows a person to make a single copy of a copyrighted work and show that copy, provided only one image of the copy is shown at one time (and provided, too, that the person is the lawful owner of a lawful copy of the material). The issue is that the First-Sale doctrine does not apply to much of the Internet's content and the subsequent dissemination of that content over the Internet. Rather than amend § 109 of the Copyright Act, however, this article examines the possibility of Congress giving copyright owners a rental right with regard to digital copies of works that likewise exist in "real space." Four theories exist with regard to whether and when the First-Sale doctrine applies to transactions over the Internet: The first theory asserts that the doctrine does not apply and does not have to, since the copyright owner's right does not extend to transmission over the Internet. Therefore, the act of displaying the information on the Internet and the inevitable copies made by those people viewing the information, do not constitute a copyright infringement. The second argues that the First-Sale doctrine does apply to Internet material, but that displaying it on the Internet likewise does not constitute an infringement. The third asserts that the doctrine applies only if the transmitted work is simultaneously destroyed at the source as it is viewed remotely Joby the user, leading to possible infringement. The fourth theory is to follow. The transmission over the Internet is a distribution in the sense of § 106 (3) of the Copyright Act because the copyright owner's rights extend to every act after which a new copy exists in the hands of another person. Unlike the First-Sale doctrine, the distribution right does not require a particular copy to be handed over. The First-Sale doctrine does not immunize violations of the right to make copies (§ 106 (a) of the Copyright Act) but applies only to the distribution right and only if the particular copy already distributed changes hands. In the course of the transmission over the Internet, a copy is created in the RAM of the receiving computer and the copy is not itself transferred. The destruction of this copy simultaneously with the transmission can not equal the situation with the handing over of the copy. Such a requirement would be impractical. The application of the First-Sale doctrine to transmissions via the Internet is incompatible with the intended purpose of promoting alienation and trade in copyrighted only as long as it does not adversely impact the copyright owner's legitimate commercial exploitation interest. The frequent use of the First-Sale doctrine that could be expected negatively impacts the interests of the copyright owner. There is no practical need for the First-Sale doctrine if persons interested in copies of the work can purchase them easily over the Internet from the copyright owner. To apply the First-Sale doctrine to Internet transmissions would make the copyright owner afraid of providing the work in a digital form and thus hinder alienation and trade of copies right from the beginning. The display portion of the First-Sale doctrine does also not apply to transmissions over the Internet because there is neither only one image displayed at one time nor are the viewers present at the same place as the copy. A rental right for the owners of copyright in digital copies should be created because the danger for the interests of the copyright owner caused by the Internet is even greater.
Keith Kupferschmid, Lost in Cyberspace: The Digital Demise of the First-Sale Doctrine, 16 J. Marshall J. Computer & Info. L. 825 (1998)