Reconstructing copyright exhaustion in the online world

According to the principle of copyright exhaustion, once a copy of a work is placed on the market, the right holder’s control over further distribution of that copy is exhausted. Unlike the distribution of hard copies of copyright works, however, the electronic dissemination of content is not subject to the exhaustion principle. This means that second-hand markets of digital goods cannot exist. Traditionally, exhaustion is premised on four assumptions that cannot be safely assumed in the online context: it applies to tangible copies only; it covers goods and not services; the goods should be sold but not licensed; and the property entitlement should be alienated upon transfer. After long jurisprudential silence, courts at worldwide level have revisited these normative impediments to affirm that exhaustion can apply online in specific instances. The article discusses the doctrinal norms that underpin exhaustion and determines the conditions under which online copyright exhaustion can apply.