ABSTRACT
The exhaustion principle, or first-sale doctrine, limits copyright holders’ control after the authorised sale of a tangible copy, enabling resale, lending, and preservation. In digital markets, however, this principle has largely become irrelevant, as distribution models now use licensing and technologies that prevent secondary use. This paper examines how the disappearance of copyright exhaustion affects four key markets for intellectual property – books, music, video, and software – along six dimensions: access, preservation, privacy, transactional clarity, user innovation, and platform competition. Drawing on a structured review of legal and economic literature, it assesses both the erosion of these benefits and possible remedies, including forward-and-delete technologies, common law exhaustion, relaxed anti-circumvention rules, and enhanced fair use provisions for libraries. The study suggests that digital distribution has shifted the balance of rights too far towards copyright holders and that differentiated regulatory reforms may be needed to restore a socially beneficial equilibrium that preserves both market efficiency and user rights.
Potgieter, Petrus H and Howell, Bronwyn E, The exhaustion principle in copyright and modern digital markets. Posted on SSRN 22 October 2025.
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