Legal Question in Intellectual Property in California

The MPAA will say you are breaking the law, and they have more money for lawyers than you do.

If you are, then you are in good company, because Blockbuster (and other DVD rental companies) engage in just this kind of conduct.

In copyright law, there is a distinction between (a) the copyrighted work itself and (b) copies of that work. Ernest Hemingway created the copyrighted Work that is entitled For Whom the Bell Tolls. That Work is an abstract entity, composed of words and thoughts. It is intangible. And his estate owns copyright in that Work.

This Work is distributed through physical printed books. Those books are Copies, and a Copy is distinct from the Work. The Copies embody the Work, but are obviously not the same as the Work. There are millions of Copies of For Whom the Bell Tolls, but there is only one Work.

When a Copy of a copyrighted Work is sold (the Copy is after all a physical object, like a car or a chair and can be sold), then the First Sale Doctrine under the Copyright Act comes into play. This doctrine is found in Section 109(a) of the Copyright Act, which reads in pertinent part:

Notwithstanding the provisions of section 106 (3) [which gives the owner of the copyrighted Work certain rights to control distribution], the owner of a particular *copy* ... lawfully made under this title ...is entitled, without the authority of the copyright owner, to sell or *otherwise dispose of* the possession of that copy....

There are statutory exceptions to the First Sale rights of a Copy owner of phonorecords or computer programs, but these exceptions do not extend to DVDs.

Thus, if you do indeed *purchase" a Copy of the DVD, you have First Sale rights to "dispose of possession" via rental to customers for their non-commercial viewing in the privacy of their rooms, "without the authority of the copyright owner [of the copyright in the Work itself]." That right doesn't give you the right to display the Work in a public place (e.g. a bar or theater), but a private display to the renter is within your rights.

This question is a subject of much controversy in the copyright industry, and DVD copyright owners have to some extent tried to emulate the owners of copyright in computer program works, who claim that they do NOT *sell* Copies of their computer-program Works at all !! Of course, if the copyright owner does not part with the title to the Copy via a sale, then there is no First Sale (or indeed, any sale at all). Hence the whole rigamarole over "licensing" of Copies (rather than "sales" thereof) via shrink-wrap agreements of computer software.

But your question was about "purchase" of a Copy, and that one is easy. First Sale rights apply under Section 109(a). You can rent out your Copy without the authorization of the copyright owner of the Work, for private viewing by your customer.

And like Blockbuster and Netflix, you should be relieved.