California Court Upholds Right to Rent Physical Media
On April 28, 2022, the U.S. District Court for the Central District of California granted the defendant’s motion for summary judgment, holding that, taking facts in the light most favorable to the plaintiff, defendant Kineticflix LLC did not violate plaintiff Alla Anatoleyvna Zorikova’s copyright when Kineticflix rented physical copies of Zorikova’s ballet instructional DVD. The court held that Kineticflix had the right to rent the DVD under the first sale doctrine.
Zorikova holds a valid copyright in a ballet instructional DVD entitled “Ballet Class Viktor Kabaniaev.”1 Kineticflix was a web-based business that rented physical copies of fitness and dance DVDs by shipping the DVDs to its customers. Zorikova alleged that Kineticflix infringed her copyright in the DVD by offering the DVD for rental as part of the online rental service.2
The Copyright Act protects fixed original works of authorship by granting to copyright owners the exclusive rights to display, perform, reproduce, or distribute copies of a copyrighted work, and to prepare derivative works based upon the copyrighted work.3 Here, Zorikova alleged that renting her DVD violated her right to distribute copies of her ballet DVD.4
The first sale doctrine, however, creates an exception to a copyright owner’s exclusive right of distribution. Under the first sale doctrine, anyone who owns a lawfully made copy of a copyrighted work “is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy.”5
Early cases have established that the first sale doctrine limits a copyright owner’s exclusive right of distribution to the owner’s “first voluntary disposition,” and it “thus negate[s] copyright owner control over further or ‘downstream’ transfer to a third party.”6 In effect, the copyright holder controls the right to the underlying work, but the owner of a particular copy can dispose of it in any manner he or she wishes.7
Between 2008 and 2014, Kineticflix rented out a copy of Zorikova’s ballet DVD to its customers.8 Applying the first sale doctrine to Kineticflix’s DVD rental service, the court held that, “[Kineticflix] was permitted to rent that copy to downstream customers without further authorization from Zorikova, the copyright holder.”9 In reaching this conclusion, the court expressly refuted Zorikova’s argument that the first sale doctrine does not allow renting physical copies, noting that “accepting [the argument] would mean that the entire video and video game rental industry is based on systemic, repeated copyright infringement” and that “case law that directly addresses video rental suggests the opposite.”10
While the Kineticflix decision continues a line of cases permitting the rental of physical media, the court’s ruling in this case does not affect the rental of purely digital or online media because customers and users of digital or online media are typically mere licensees that do not possess title to such media, thereby precluding them from using the first sale doctrine as a defense.11 In addition, the rental process of purely digital media usually creates an unlawful digital reproduction of the media, which is also not protected under the first sale doctrine.
For more information on new developments in copyright litigation, please contact a member of the firm’s trademark and copyright litigation practice. For more information about electronic gaming, please contact any attorney in the firm’s electronic gaming practice.
 17 U.S.C. § 109(d) provides that “[t]he privileges prescribed by subsections (a) and (c) do not, unless authorized by the copyright owner, extend to any person who has acquired possession of the copy or phonorecord from the copyright owner, by rental, lease, loan, or otherwise, without acquiring ownership of it.” See also Gary Greenstein et al., “Consumer’s Claims About His Rights to iTunes Purchases Survives Motion to Dismiss,” Wilson Sonsini (July 30, 2021), https://www.wsgr.com/en/insights/consumers-claims-about-his-rights-to-itunes-purchases-survives-motion-to-dismiss.html.