The First Sale Doctrine in Uganda: Striking a Balance Between Intellectual Property Rights and Secondary Markets in the Digital Era.

The first sale doctrine, also known as the exhaustion doctrine, is a foundational principle in intellectual property (IP) law that governs the rights of owners and consumers over copyrighted, patented, and trademarked goods after their initial authorised sale.

This doctrine has evolved, shaped by statutory law, judicial interpretation, and the practical realities of commerce across different jurisdictions.

Its core function is to balance the exclusive rights granted to IP holders with the freedom of purchasers to use, resell, or otherwise dispose of lawfully acquired goods, thus fostering robust secondary markets and consumer autonomy.[1]

The doctrine’s origins can be traced to late 19th century common law, most notably in the United States. Early cases like Adams v. Burke[2] established that once a patented product was sold, the patent holder’s control over that specific item was exhausted.

In the realm of copyright, the doctrine was codified in Section 109(a) of the U.S. Copyright Act, which explicitly allows the owner of a lawfully made copy to sell or otherwise dispose of that copy without further permission from the copyright owner[3]. This principle is not limited to the U.S. because variations exist worldwide, though the scope and application differ, especially regarding international trade and digital goods.[4]

The practical impact of the first sale doctrine is evident in everyday life. When you purchase a book, CD, or DVD, you are free to resell it, lend it to a friend, or donate it to a library. This freedom underpins the existence of used bookstores, libraries, online marketplaces, and charitable donations.[5] 

The doctrine, however, draws a clear line; while you may transfer ownership of the physical copy, you do not acquire the right to reproduce, publicly perform, or create derivative works from the copyrighted material. Thus, if you buy a painting, you can sell or display it, but you cannot legally make prints for sale without the artist’s permission.

The doctrine’s reach extends into patent and trademark law. In patent law, the exhaustion principle limits the patent holder’s ability to control the use or resale of a patented product after its authorized sale. In trademark law, the doctrine supports the free movement of genuine goods in commerce, preventing trademark owners from restricting resale of products they have already introduced to the market.[6] This fosters competition and prevents perpetual control over goods, ensuring that secondary markets can thrive.

However, the doctrine’s application is not without controversy or limitation. One major area of debate is the treatment of digital goods and online content. Digital items, such as software or e-books, are often licensed rather than sold, and their transfer frequently involves making new copies, which falls outside the protection of the first sale doctrine.[7] Courts and lawmakers continue to grapple with whether and how the doctrine should apply in the digital context, especially as virtual goods and metaverse tokens become more prevalent.

Internationally, the doctrine’s scope varies. The United States generally recognizes international exhaustion, meaning that once a product is sold anywhere in the world with the IP owner’s authorization, it can be imported and resold in the U.S. without infringing IP rights. This position was affirmed in the landmark Supreme Court case Kirtsaeng v. John Wiley & Sons, Inc.[8], which held that the first sale doctrine applies to goods lawfully made and sold abroad. In contrast, the European Union adopts a regional exhaustion approach, where IP rights are exhausted only within the European Economic Area (EEA), and parallel imports from outside the EEA may still be restricted.[9]

In Uganda, the first sale doctrine is recognized under the Copyright and Neighbouring Rights Act, which allows the owner of a lawful copy to resell or dispose of it without infringing copyright. The Industrial Property Act and the Trademarks Act similarly incorporate exhaustion principles, though the precise scope, whether national, regional, or international exhaustion, may not be as explicitly defined as in U.S. or EU law. Ugandan law, like many others, distinguishes between ownership of the physical item and the underlying IP rights, ensuring that resale or lending does not extend to unauthorized reproduction or commercial exploitation of the work.[10]

A comparative analysis across jurisdictions highlights both commonalities and differences. In the U.S., a student can freely resell a used textbook, and a museum can display a purchased artwork without seeking additional permissions. In the EU, a Ugandan trader importing genuine goods from France may lawfully resell them in Uganda if Ugandan law recognizes international exhaustion, otherwise, the trademark owner could object. In Uganda, the doctrine enables local businesses and consumers to participate in secondary markets, though enforcement and judicial interpretation continue to evolve.

The doctrine is not absolute. IP owners can sometimes limit its application through contractual restrictions or licensing agreements, especially in the context of software, digital goods, or specialized products.

Additionally, the doctrine does not permit the reproduction of works, only the transfer of lawfully acquired copies. Exceptions also exist for certain types of works, such as computer software and recorded music, where leasing may be restricted to protect the interests of creators and publishers.

A recent and highly publicized dispute highlighting the limits of the first sale doctrine is the case between Chanel and the luxury reseller What Goes Around Comes Around (WGACA). WGACA, a prominent retailer of secondhand luxury goods, was sued by Chanel for trademark infringement, false association, unfair competition, and false advertising. While the first sale doctrine generally allows resellers to sell genuine, pre-owned goods, Chanel argued that WGACA’s marketing and presentation went far beyond simple resale.

The brand accused WGACA of creating the false impression that it was affiliated with or authorized by Chanel, especially through extensive use of the Chanel trademark in advertising, social media, and in-store displays. The jury ultimately sided with Chanel, awarding statutory damages and finding that WGACA’s practices likely misled consumers about the nature of its relationship with the luxury brand.

This case demonstrates that while the first sale doctrine protects the resale of genuine goods, it does not grant resellers carte blanche to use a brand’s trademarks in ways that suggest endorsement or partnership, especially in the luxury sector where brand image and consumer perception are paramount.[11]

This statutory recognition aligns Uganda with global norms but leaves practical enforcement and interpretation to courts, which have yet to produce landmark rulings on IP-specific exhaustion disputes.

In practice, disputes analogous to the first sale doctrine often arise in Uganda’s commercial sector, albeit through the lens of tangible goods rather than intellectual property. For instance, in Nipun Bhatia v. Boutique Shazim Ltd[12], a property dispute centered on lawful ownership and resale rights, the court emphasized that purchasers retain the right to transfer lawfully acquired goods, a principle mirroring the exhaustion doctrine’s core premise. Similarly, Wagagai Mining v. Freight Sendy Ltd[13], a High Court case involving unlawful detention of goods, reinforced the rights of lawful purchasers to distribute acquired goods, even if the dispute itself did not directly engage IP law. These cases, while not IP specific, reflect Uganda’s broader legal environment, which supports secondary markets and consumer rights to resell physical goods, as further codified in the Sale of Goods Act, which governs transactions and ownership transfers.

Further illustrations of how the first sale doctrine might operate in Uganda. For example, a student reselling a used textbook in Kampala would be protected under the Copyright Act, akin to the U.S. Supreme Court’s ruling in Kirtsaeng v. John Wiley & Sons, Inc.[14], which upheld the doctrine’s application to goods lawfully sold abroad. However, ambiguities arise in cross-border contexts. A Ugandan retailer importing genuine luxury goods (e.g., Chanel bags) from France could face trademark disputes if courts limit exhaustion to national or regional sales, as seen in the EU’s regional exhaustion model. Digital goods, such as e-books or software, present additional challenges, as Uganda lacks precedent for digital exhaustion, leaving resale practices in legal limbo, a gap mirrored globally.

The absence of high profile IP cases testing the first sale doctrine in Uganda underscores the need for judicial development, particularly as the digital economy grows. Unlike the U.S. or EU, where cases like Chanel v. What Goes Around Comes Around[15] clarify the doctrine’s limits in trademark contexts, Ugandan courts have yet to address how marketing practices (e.g using a brand’s trademarks in resale ads) might infringe IP rights. This gap leaves businesses and consumers navigating uncertainty, especially in sectors like pharmaceuticals or electronics, where parallel imports could trigger disputes if IP owners challenge international exhaustion. As Uganda’s economy integrates further into global trade, its courts will need to define the doctrine’s scope explicitly, balancing IP protection with consumer rights to foster competitive secondary markets.

In summary, while Uganda’s legal statutes align with global exhaustion principles, the lack of IP specific case law creates ambiguity, particularly for cross border and digital goods. Judicial clarity will be critical to harmonizing Uganda’s IP framework with evolving commercial realities.

The first sale doctrine plays a vital role in shaping the landscape of intellectual property law. It supports the free flow of goods, empowers consumers, and sustains secondary markets while maintaining a fair balance with the rights of creators and innovators. As commerce becomes increasingly digital and globalized, the doctrine faces new challenges and opportunities for refinement. In Uganda and beyond, its continued evolution will ensure that IP law remains effective and equitable in a rapidly changing world.

By Edgar Okitoi

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[1] Intellectual Property’s First Sale Doctrine and the Policy Against Restraints on Alienation. https:www.semanticscholar.org/paper/97725acc47a82d1b4bf657955324f30c63374e93 ; First Sale Doctrine of Copyright | Intellectual Property Center https://theipcenter.com/2019/05/exhaustion-of-copyrights-based-on-sale/; First Sale Doctrine – Not a Get out of Jail Free Card | JD Supra https://www.jdsupra.com/legalnews/first-sale-doctrine-not-a-get-out-of-8915911/ 

[2] Adams v Burke | 84 U.S. 453 (1873)

[3] Understanding the Doctrine of First Sale in Intellectual Property Copyright - Attorney Aaron Hall https://aaronhall.com/understanding-the-doctrine-of-first-sale-in-intellectual-property-copyright/

[4] Intellectual Property Licensing and Transactions https://www.semanticscholar.org/paper/750509a74d73ce7cf4d8168e58a1f93a1a348372

[5] Intellectual Property's First Sale Doctrine and the Policy Against Restraints on Alienation https://www.semanticscholar.org/paper/97725acc47a82d1b4bf657955324f30c63374e93

[6] The Key Purpose of Copyright's First Sale Doctrine https://www.copyrighted.com/blog/copyrights-first-sale-doctrine

[7] First Sale Doctrine in the Digital Era https://www.semanticscholar.org/paper/dd1fa75bebdc34d25959f73d15d4cf0f5cf23afd

[8] Kirtsaeng v John Wiley & Sons, Inc, 568 U.S. 519 (2013)

[9] The First-Sale Doctrine in International Intellectual Property Law: Trade in Copyright Related Entertainment Products https://www.semanticscholar.org/paper/8066f225172c1495f229d76067139308a30fe055

[10] First Sale Doctrine of Copyright | Intellectual Property Center https://theipcenter.com/2019/05/exhaustion-of-copyrights-based-on-sale/

[11] Chanel v. WGACA: Who Can Sell Chanel? https://www.thefashionlaw.com/chanel-v-wgaca-a-case-about-trademarks-but-also-who-can-sell-chanel/ ; Chanel wins case against luxury vintage reseller What Goes Around ... https://ww.fashionnetwork.com/news/Chanel-wins-case-against-luxury-vintage-reseller-what-goes-around-comes-around,1602438.html ; Chanel's Court: Litigation with What Goes Around Comes Around https://journals.library.columbia.edu/index.php/lawandarts/announcement/view/686

[12] Narottam Bhatia and anor v Boutique Shazam Ltd Civil Appeal No. 16 of 2009

[13] Wagagai Mining (U) Ltd & ors v Freight Sendy Limited and ors [ 2024] UGCommC 19

[14] Ibid, Supra note 8

[15] Chanel, Inc. v What Goes Around Comes Around LLC, 1:18-cv-02253, (S.D.N.Y.)