Meet the Unavoidable – The Challenges of Digital Second-Hand Marketplaces to the Doctrine of Exhaustion

Abstract

Problems associated with the doctrine of exhaustion have grown concurrently with the emergence of digital technologies, in particular with development of the internet. The question as to whether the doctrine of exhaustion is applicable to digital files has become pressing since shortly after protected subject-matter (especially software, audio and audiovisual content, e-books) has been predominantly (or at least significantly) sold online. This dilemma challenges the pre-existing set of economic rights, freedom to provide services, free movement of goods, as well as the traditional business models of the copyright industry. Courts have faced legal disputes more often following the Millennium, and undoubtedly disputes surrounding the idea of digital exhaustion are far from over. The paper summarizes the key elements of the UsedSoft and the ReDigi rulings, and it collects the pros and cons regarding possible introduction of a digital exhaustion doctrine. I argue that the traditional positivist approach is a dead end, whereas a constructive realistic approach can convincingly serve as the basis for application of the doctrine in the digital age.