DIGITAL RESALE: ASSESSING THE IMPACT OF R.A. NO. 10372 AND THE FIRST SALE DOCTRINE ON DIGITAL MEDIA TRANSACTIONS IN THE PHILIPPINES

Michael Gerard T. Victoriano (JD'14)

ABSTRACT

Licensing agreements are commonplace in today's digital age of content distribution as a means of restricting the use of digital media in the Internet. In popular media distribution platforms such as Apple Inc. 's iTunes, these licensing agreements take the form of "clickwrap" or "shrinkwrap" agreements that are used as a means of retaining control over the music, movies, and applications bought by consumers in the digital environment. While consumers could confidently assert ownership of legitimately purchased physical copies of the aforementioned copyrighted works, the certainty of their ownership over the digital version of such products remains a largely open question. In the Philippines, this question has yet to be touched by our jurisprudence. However, it seems that the recently amended Intellectual Property Code already provides for the basis by which claims of ownership over digital media can be made_ It now becomes imperative to determine the ;statutory basis of digital ownership, due to the rapid expansion and ubiquity of broadband internet access in the country. The changes introduced by Republic Act No. 103 72 to our Intellectual Property Code, in particular the removal of importation limits on copyrighted goods, could have a significant effect on digital ownership of such goods in the internet. Eventually our courts will have to resolve the following questions: "Are consumers of digital copyrighted products mere licensees, or are they full owners of their copies?" and "In the event that they are indeed owners pursuant to a digital sale, can they resell their own copies without fear of copyright infringement?” Amidst the owner-licensee debate, extending the effect of the First Sale Doctrine to the digital space seems to provide the answer to settle the issue. Therefore, the allowable extent that the First Sale Doctrine will exhaust digital copyright should be precisely determined. Since Philippine jurisprudence has hardly explored, much less interpreted, the provisions of law covering the exhaustion doctrine, resort must be had to the general principles of International Copyright Law to clarify the principles underlying our own statutes. Thereafter, there is a need to look beyond our jurisdiction, in particular to the United States and the European Union whose courts have already encountered several cases wherein the First Sale Doctrine has been invoked in relation to copyrighted goods in the digital environment.