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LIT-1297: The End of Ownership: Personal Property in the Digital Economy

3 min read

Properties3
StatusActive — read 2026-10-20 (NOTE-1026) in full except the last page of the Conclusion, which the copy lacks; worth reading as the standard account of how licences, DRM and the copy-centred law of exhaustion turn digital purchases into conditional access, with the case law from Bobbs-Merrill to Lexmark v. Impression Products, a survey showing that "Buy Now" misleads buyers, and a proposed multifactor test for digital exhaustion. Its diagnosis is the consumer side of Lessig's copy trigger: exhaustion is tied to owning a copy, and digital use and transfer make new copies. Read it knowing that it is US law as of early 2016, that it is advocacy by two authors who were parties or counsel in several of its episodes, that the survey is their own and of a mock store, and that several of its pending cases have since been decided.
Tagssociety-and-governance, social-science
Cited as “paper” byNOTE-1026 — Perzanowski and Schultz — The End of Ownership

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Perzanowski, A., and Schultz, J. (2016). The End of Ownership: Personal Property in the Digital Economy. Information Society Series. Cambridge, MA: The MIT Press. Open-access edition (ISBN 9780262335959).

Key takeaways

From the reading, NOTE-1026.

  • Licensed, not sold. Digital retailers say the buyer gets a licence, not a copy: “Kindle Content is licensed, not sold, to you.” (p. 4). The licence then forbids resale, lending and transfer, and lets the seller revoke access (pp. 61–62, 84–85).
  • Exhaustion is tied to the copy. The first sale doctrine lets the owner of a copy sell, lend or give it away against the copyright holder’s wishes (pp. 25–27). Digital transfer makes a new copy, so it is not covered (ReDigi, pp. 40–41). Cloud and streaming leave no clear copy to own: “Without copies, under current law, there’s simply nothing to own.” (p. 48).
  • A licence is a permission, not a contract. Courts since ProCD enforce terms nobody reads as contracts (pp. 65–71). The authors argue that a licence presupposes ownership and cannot create it: “A license does not—in fact, cannot—define property rights; it depends on predetermined property rights.” (p. 72). Ownership should turn on the economic reality of the deal: duration, one-time payment, and how it was sold (pp. 76–77).
  • “Buy Now” misleads. In the authors’ survey of nearly 1,300 likely buyers, most thought a digital purchase was theirs to keep and use on any device, and more than 40 percent thought they could lend or give it away (pp. 90–95). A short notice cut the errors; “License Now” did not (pp. 99–101).
  • DRM and §1201 carry the licence into devices. Section 1201 of the DMCA makes breaking DRM unlawful even for lawful uses (pp. 130–132), and the same locks now sit in printers, coffee makers, tractors, cars and pacemakers (chs. 7–8). Patent law offers a parallel route through post-sale restrictions (ch. 9).
  • Reforms. Police “Buy Now” through the FTC; rein in form contracts; exempt owners from §1201; restore patent exhaustion; and a multifactor test for digital exhaustion that tracks “who has the right to use and transfer” a work rather than counting copies (ch. 10, pp. 179–188).

Standing in the record

Filed on 2026-10-20 at the owner’s request, with Lessig’s Remix (LIT-1298), as a second reading on what copyright’s reliance on the copy does to ordinary use. It does not cite Lessig. It reaches the same copy-trigger diagnosis from the side of the buyer’s property rather than the remixer’s creativity, and it sets remix aside explicitly (p. 183). It quotes Doctorow on DRM lock-in (p. 134) and supplies the case law behind the lock-in and interoperability steps of the enshittification argument (THEORY-150, THEORY-470; LIT-731, LIT-033). How it bears on those and on the translation line is set out in the reading.

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