Considering the Reach of Phelps

Abstract

As the Court in Quanta recently confirms, patent and copyright owners have limited rights following voluntary transfers of protected goods. Moreover, as discussed at length by the Second Circuit in Platt & Munk Co. v. Republic Graphics, Inc., patent owners' rights have long been similarly affected by involuntary transfers. Platt & Munk finds lack of equivalent copyright rulings remarkable but does not allow lack of direct precedent to stand in the way of finding that involuntary transferees of copyright-protected goods have the same rights as voluntary transferees. This comment considers the Fourth Circuit's opinions in Christopher Phelps & Assoc., LLC v. Galloway. Initiallly, that court went one step further, holding, under the first sale doctrine, an infringer is entitled to sell, or otherwise dispose of any copy that the court does not order destroyed or otherwise disposed of, without further obligation, once he satisfies the judgment that remedied the infringement, even if the copy was originally pirated. Those remarks were undoubtaibly colored by the subject of the dispute, however, Defendant's million-dollar house had been constructed according to unauthorized copies of plans that initially sold for only $20,000. The initial opinion was withdrawn, along with most references to the first-sale doctrine, and more emphasis was placed on eBay's limitations on the availability of injunctions. It is unclear whether the eBay opinion, more than concern about encumbering real estate unrelated to the infringement motivated refusal to enjoin sale or lease of a house as a remedy for unauthorized use of plans used for its construction.