This cornucopia of auction offerings sometimes includes copyrighted and/or trademarked property — such as a book, which clearly denotes that the book has been copyrighted.
Can a book which is copyrighted be sold at auction? Can an auctioneer secure a buyer for a seller regarding a copyrighted item? Sure, and it happens all the time.
Or, can a trademarked name (Tiffany, for example) be used to describe an item selling at auction? This too is okay under most conditions.
So what restrictions are there — if any — in regard to selling copyrighted and/or trademarked property? This question is answered by the first-sale doctrine as codified 17 U.S.C. § 109.
This doctrine says that an owner of a genuine and unmodified item (despite copyrighted or trademarked status) purchased at an authorized sale may resell the item — and even describe it by the trademarked name.
However a book publisher, for example, might begin to take note when a seller sells a large number of their books. At that point, is the seller portraying himself as a dealer or authorized reseller? Is that seller potentially damaging the original publisher’s reputation. brand and/or profits?
Basically, the restrictions begin to materialize when the seller (or an auctioneer) does any of these three things:
- Reproduces or modifies the item but portrays it as original.
- Acquires the item from an unauthorized source and markets it.
- Portrays himself as sponsored by, an authorized dealer or product representative of the original manufacturer without permission.
A notable case involving some of these principles is known as Tiffany (NJ) Inc. v. eBay Inc. 600 F.3d 93 (2nd Cir. 2010) where the courts ruled basically [in part] that eBay had not violated the first-sale doctrine.
As such, a general rule is: a jewelry store can say that it’s selling a Tiffany necklace, but not infer that it’s a Tiffany authorized dealer unless it indeed is, or otherwise has Tiffany’s consent.
Nonetheless, speaking of eBay, the mammoth online platform restricts use of many trademarks without the express permission from the owners. Their Verified Rights Owner (VeRO) Program allows companies to list their name thus forbidding sellers from using trademarked verbiage without authorization — seemingly contrary to the principles of the first-sale doctrine.
The first-sale doctrine only extends to ownership, and not property merely leased, loaned or licensed; typically software is distributed in this fashion, thus prohibiting it from being “sold” to others for subsequent installs.
For auctioneers, the first-sale doctrine is important. Sellers’ property should be reviewed for compliance with the first-sale doctrine, for which penalties for sellers violating such can include jail time and as much as $250,000 in fines. Relatedly, auctioneers as agents for sellers in violation could be found liable as well.
Mike Brandly, Auctioneer, CAI, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, Keller Williams Auctions and Goodwill Columbus Car Auction. He serves as Adjunct Faculty at Hondros College of Business, Executive Director of The Ohio Auction School and Faculty at the Certified Auctioneers Institute held at Indiana University.