[Excerpt] “As the Supreme Court recently confirmed in Quanta Computer, Inc. v. LG Electronics, Inc., patent and copyright owners have limited rights following voluntary transfers of protected goods. Moreover, as discussed at length by the Second Circuit in Platt & Munk Co. v. Republic Graphics, Inc., patent owners‟ rights have long been similarly affected by involuntary transfers. Platt & Munk finds the lack of equivalent copyright rulings remarkable, but does not allow lack of direct precedent to stand in the way of finding that involuntary transferees of copyright-protected goods have the same rights as voluntary transferees.
Initially, the Fourth Circuit, in Christopher Phelps & Associates, LLC v. Galloway, went one step further. Citing Platt & Munk and the Restatement (Second) of Torts, it held, “under the first sale doctrine, an infringer is entitled to sell, or otherwise dispose of any copy that the court does not order destroyed or otherwise disposed of, without further obligation, once he satisfies the judgment that remedied the infringement, even if the copy was originally pirated.” But those remarks are colored, perhaps more than usual, by the subject of the dispute—the defendant's million-dollar house, constructed according to unauthorized copies of the plaintiff's plans. After trial, a jury had awarded $20,000—the fee previously paid for the authorized plans—but the district court refused all injunctive relief with regard not only to completion of the house or its sale or lease, but also to the return or destruction of copies of the unauthorized plans used to build it.”
Thomas G. Field, Jr. , Considering the Reach of Phelps, 7 Pierce L. Rev. 121 (2008), available at http://scholars.unh.edu/unh_lr/vol7/iss1/6