Bobbs-Merrill Co. v. Straus
1908 U.S. LEXIS 1513, 210 U.S. 339, 28 S. Ct. 722 (1908)
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Rule of Law:
The exclusive right of a copyright holder to 'vend' a work under U.S. copyright law is exhausted after the first authorized sale of a particular copy of that work. Consequently, the copyright holder cannot, by means of a notice printed on the work, control the subsequent resale price of that copy.
Facts:
- The Bobbs-Merrill Company owned the copyright for a novel titled 'The Castaway.'
- Inside each copy of the book, Bobbs-Merrill printed a notice stating the retail price was '$1.00 net' and that any sale at a lower price would be treated as a copyright infringement.
- Isidor Straus and Nathan Straus, partners of R. H. Macy & Co., purchased copies of 'The Castaway' from wholesale dealers.
- The wholesale dealers from whom Macy & Co. purchased the books had no contractual agreement with Bobbs-Merrill to enforce the price restriction.
- Macy & Co. was aware of the price restriction notice printed inside every copy it purchased.
- Macy & Co. sold copies of the book at a retail price of 89 cents, without the consent of Bobbs-Merrill.
Procedural Posture:
- The Bobbs-Merrill Company (complainant) filed a suit for an injunction against Isidor Straus and Nathan Straus of R. H. Macy & Company in the Circuit Court of the United States for the Southern District of New York (a federal trial court).
- The Circuit Court dismissed the bill, ruling in favor of Macy & Co.
- Bobbs-Merrill (as appellant) appealed the decision to the U.S. Circuit Court of Appeals.
- The Circuit Court of Appeals affirmed the trial court's dismissal.
- Bobbs-Merrill (as appellant) appealed to the Supreme Court of the United States.
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Issue:
Does a copyright holder's statutory sole right to 'vend' a copyrighted book grant them the authority to control the subsequent retail price of that book after its initial sale, by placing a restrictive price notice within the book itself?
Opinions:
Majority - Justice Day
No. A copyright holder's statutory right to vend does not grant them the power to control the resale price of a copy of the work after the first authorized sale. The court reasoned that copyright protection is purely statutory and its primary purpose is to secure the author's right to multiply and distribute copies of their work. The 'sole right to vend' is exhausted with respect to a particular copy once the copyright holder parts with title to it in a first sale. To allow the copyright holder to control all future sales of that copy through a mere notice would be an extension of the rights granted by the statute beyond what Congress intended, especially in the absence of any contractual privity between the copyright holder and the subsequent seller.
Analysis:
This decision established the 'first-sale doctrine' in United States copyright law, a fundamental principle later codified in the Copyright Act of 1976. The ruling clarifies that the copyright owner's distribution rights for a specific physical copy are exhausted after the first authorized sale. This doctrine is critical for the existence of secondary markets for copyrighted works, such as used bookstores, libraries, and video rental stores. By distinguishing between the intangible copyright and the tangible property of the sold copy, the Court prevented copyright holders from exercising perpetual control over the physical goods embodying their intellectual property, thereby balancing the rights of creators with those of consumers and property owners.
