Bucerius Law School, Hamburg, Germany
October 11, 2013

Professor Dr. Ansgar Ohly (Ludwig-Maximilians-Universität München)
Exhaustion of Rights: A Concept for the Digital World?

In the analogue world, the concept of exhaustion strikes a fair balance between the right owner's interest in adequate remuneration and the public interest in the free movement of goods: after first sale, the additional layer of legal regulation which IP law provides for intangible subject-matter is removed, and the embodiment of a work (an invention, a mark) is treated like any other tangible good.

In the digital environment, exhaustion reaches its limits, as we experience a dematerialization of IP embodiments: from asset (book, CD) to access (to data or to "the cloud"). In Oracle/UsedSoft, the CJEU applied exhaustion to the online sale of software, whereas US courts have held differently. Is the CJEU right? Can the ratio of Oracle/UsedSoft be applied to other types of work such as books or music? Should the doctrine of exhaustion be replaced by a more radical doctrine, which would make the free transferability of licenses mandatory? Will right owners try to undermine online exhaustion by contractual or technical measures and should the law allow them to?

This presentation will not attempt to give final answers to these questions in 20 minutes – but it will offer some ideas on whether a concept developed in the 19th century will survive in the brave new world of digital communication.