The Copyright Act grants the copyright holder (whether it be you or your
company or another person or entity) certain exclusive rights. Among other rights, the
copyright holder has the exclusive right to do and to authorize the following acts:
(1) reproduction of the copyrighted work;
(2) preparation of derivative works based on the copyrighted work; and
(3) distribution of copies of the copyrighted work.
A derivative work is a work based upon one or more preexisting works, including
modifications that, as a whole, represents an original work of authorship. Significant
modifications or enhancements to an existing work will likely create a new, derivative
work that is separately copyrightable.
As provided by the Copyright Act, the copyright holder's exclusive rights are
subject to a number of limitations. If a person's use of the copyrighted material falls
within one of the designated limitations then the use is not an infringement of the
copyright holder's exclusive rights. Two of the most common limitations are the fair
use and first sale doctrines.
a. Fair Use
The fair use doctrine allows an individual or entity to use copyrighted
materials in a reasonable manner without the copyright holder's consent. To determine
whether a use is fair, the courts consider the following four factors:
(1) the purpose and character of the allegedly infringing use;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted
work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted
The above factors are nonexclusive and require a case-by-case determination of
whether a person's use of copyrighted material is fair.
b. First Sale Doctrine
Pursuant to the first sale doctrine, when you or your company or another
person acquires ownership of a lawfully made copy of a copyrighted work (such as a
music CD), the copyright owner no longer has any right to control the further
distribution of that copy. The owner of the copy may sell or otherwise dispose of the
copyrighted work. This exception only applies to copies lawfully made and does not
otherwise affect the copyright holder's exclusive copyright rights.