Page:Bourne v. Walt Disney (2d Cir. 1995).pdf/12

 in this title shall be deemed to forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been lawfully obtained. 17 U.S.C. § 27 (1909 Act) (emphasis added). A similar provision appears in the Copyright Act of 1976. See 17 U.S.C. § 109. These provisions generally are considered to enunciate the first sale doctrine. See Nimmer, supra, § 8.12[B]. Disney argues that, since it was authorized under the various license agreements to synchronize the Compositions with its videocassettes, the first sale doctrine permits it to transfer the resulting videocassettes as it sees fit.

In Platt & Munk Co. v. Republic Graphics, Inc., 315 F.2d 847 (2d Cir.1963), this court noted that, while the language of section 27 is quite expansive, a literal reading of the statute is unacceptable, stating that

"[i]f lawful possession by another sufficed to deprive the copyright proprietor of his right to control the transfer of the copyrighted objects, any bailee of such objects could sell them without infringing the copyright…. In view of the necessary role played by manufacturers, shippers, and others in producing and distributing copies of copyrighted works, … a copyright proprietor could not present his work to the public without risking the loss of part of his copyright protection."

Id. at 851. The court also noted that a literal reading of the statute would leave a “purchaser of a copy from a conceded pirate … free to resell” the copy. Id. Rather than looking simply at whether the lawful possession of the copy has passed, we framed the issue as “whether or not there has been such a disposition of the article that it may fairly be said that the … [copyright proprietor] has received his reward for the use of the article.” Id. at 854 (quoting United States v. Masonite Corp., 316 U.S. 265, 278, 62 S.Ct. 1070, 1077, 86 L.Ed. 1461 (1942)).

Relying primarily on Platt & Munk, Bourne contends that the first sale doctrine is inapplicable here. Bourne argues that Disney, even if it lawfully possessed the videocassettes, did not acquire the videocassettes as the result of a “first sale” by Bourne, the copyright owner. Since no transfer of copies passed from Bourne to Disney, Bourne argues that no “first sale” has occurred. We disagree.

In our view, Bourne reads our decision in Platt & Munk too broadly. This is not a case where the party claiming the benefit of the first sale doctrine is simply a bailee that acquired a possessory interest in the goods. For example, the possessor of the copies in Platt & Munk was an unpaid manufacturer of goods that were alleged to be defective by the copyright proprietor who had ordered them. 315 F.2d at 849. Here, the party claiming the benefit of the first sale doctrine, Disney, was licensed by Bourne to exploit the copyrighted compositions in connection with its motion pictures. Having so licensed Disney, we do not see any good reason why Disney should not be able to dispose of these lawfully made copies as it wishes. Accord Nimmer, § 8.12[B][3].

Bourne also asserts that it received no “reward” for Disney’s sale of copies of videocassette recordings containing the Compositions. This assertion, however, ignores the circumstances by which Bourne came to own these copyrights. As discussed above, the Compositions at issue here were created by Disney. Disney, in turn, conveyed these valuable copyrights to Bourne in exchange for, inter alia, a broad grant to Disney that would allow it to exploit the Compositions in connection with its motion pictures. Under the circumstances of this case, “it may fairly be said that [Bourne] has received [its] reward for the use of the article.” We therefore reject Bourne’s contention that Disney’s