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DVD Consumer Rights
DVD warning notices, displayed on both the product packaging of commercial DVDs and on screen when the content is played, often notify buyers that certain uses of the DVD are prohibited under copyright law. But a recent legal case has shown that these warnings may sometimes describe what the copyright holder would like the law to be, rather than what the relevant legislation and case law suggests it actually is. This page seeks to offer a neutral summary of the rights of consumers in the United States and Europe who buy or rent DVDs.
Summary of rights of DVD buyers
The following summary covers people who buy a DVD through normal retail outlets in the jurisdictions below. It may not cover those who have bought grey-market imports, imported DVDs personally, or received free or promotional DVDs.
The full text of the article explains and expands the summary.
Summary of DVD owners' rights by jurisdiction
Notes to table:
1. Provided not in the course of a business or for direct or indirect economic or commercial advantage.
2. Provided not through an establishment accessible to the public.
3. Provided the original is not subsequently sold, exchanged, rented or lent.
4. More information required on this point.
Example warning texts displayed by copyright owners
An example of a copyright warning displayed on playing the content a DVD is:
Warning: The copyright proprietor has licensed the programme (including, without limitation, its soundtrack) contained in this video cassette or Digital Versatile Disc for private home use only. Unless otherwise expressly licensed by the copyright proprietor, all other rights are reserved. Use in other locations such as airlines, clubs, coaches, hospitals, hotels, oil rigs, prisons, schools and ships is prohibited unless expressly authorized by the copyright proprietor. Any unauthorized copying, editing, exhibition, renting, hiring, exchanging, lending, public performances, diffusion and/or broadcast, in whole or in part, is strictly prohibited. Any such action establishes liability for a civil action and may give rise to criminal prosecution.
An example text from DVD packaging is:
WARNING: All rights of the producer and of the owner of the work reproduced reserved. Unauthorised copying, hiring, lending, public performance, radio or TV broadcasting of this DVD prohibited.
Although European and American jurisdictions differ, one of the exclusive rights granted to copyright owners by law in many OECD countries is an exclusive "distribution right", meaning the right to stop others from distributing copies of the owner's work – such as by reprinting a book, showing a movie to a roomful of paying spectators, or playing music from a CD in the public rooms of a hotel.
But this exclusive "distribution right" is limited by what is known in the United States as the first-sale doctrine, and in Europe as exhaustion of rights. This is the notion that once the copyright holders have made money from selling a copy of the work to a customer, they cannot stop the customer from selling or disposing of the copy. Libraries, used booksellers and record stores, video rental shops and CD-swapping communities are all examples of businesses that could not exist without the first sale or exhaustion of rights doctrines.
Copyright owners have tried for many years to fight back against the first-sale doctrine, and have had some success. In 1984, music sales were hit by a growing trend, starting in Japan, where record shops would sell customers a record and a blank tape, and then allow the record to be returned the next day. The record companies then lobbied Congress to pass the Record Rental Amendments to the US Copyright Act in 1984, which outlawed the renting of "phonorecords" for commercial gain. The software industry received similar protection in 1990, when the Computer Software Amendments to the US Copyright Act prohibited owners of copies of computer programs from renting onwards or leasing the software to someone else "for direct or indirect commercial advantage".
In addition to seeking protective legislation, copyright holders have also tried to characterize the transaction with their customers as a "license", not a "sale" -- which, when supported by the courts, removes the buyer's first-sale protections.
In a prominent recent case, however, judges have thrown out the claim that a transaction where the buyer gets the product over the counter for a one-time payment, and does not have to return the goods afterwards or to make rental payments during the period of use, can be viewed as the sale of a license. A notable example is the case of Timothy Vernor v. Autodesk, Inc, in which a software company interfered with a trader who had been buying used copies of its AutoCAD package and reselling them on eBay, and the trader successfully obtained a declaratory judgment from the US District Court that he was within his rights to do so -- a position endorsed by William Patry, author of a leading treatise on copyright law.
The current legal status of DVD owners
A 2007 case in the Sixth Circuit of the US District Court has confirmed that buyers of DVDs can clearly claim the protection from the first-sale doctrine. In a dispute whose principal focus was whether audio books were subject to the same rental-right restrictions as music recordings, the Court cited the report issued by the House of Representatives when the rental-right restrictions were passed, and observed that motion pictures were "specifically excluded" – meaning that all legitimate DVD buyers, business or consumer, are free to exchange, sell, rent or lend them out as they choose, as long as they do not make more copies or exhibit them in public.
In Europe, consumers and businesses clearly have the right to sell or exchange DVDs they have bought. The Directive allows consumers also to lend out DVDs provided they are not doing so for "direct or indirect economic or commercial advantage" or "through an establishment accessible to the public".
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