Digital Exhaustion And Hybrid Software: A Predominant Purpose Test For Reconciling Eu And Indian Copyright Law
- IJLLR Journal
- May 8
- 2 min read
Deepak Patel & Shivangi Haldwani, LL.M. (IPR), National Law University, Delhi
ABSTRACT
This article discusses whether the copyright exhaustion doctrine (also known as the first sale doctrine) can be applied to hybrid software products, i.e. works that combine functional computer programs with substantial expressive elements such as user interfaces graphics icons, fonts, and templates. Comparative analysis shows that European Union law and Indian law have very different approaches, resulting in two completely different situations for digital resale. According to case law of the EU, the digital exhaustion principle is applicable to computer programs that is sale of downloaded software copies is allowed, but is denied for other creative works. Such difference causes the great legal uncertainty in the EU for hybrid products, as it is not known which regime will be applicable.
Being an entirely different context, India offers another viewpoint. Although the Copyright Act, 1957 still upholds the principle of exhaustion, to a great extent limited only to the domestic market. It was generally equated with physical copies only. So far, Indian courts and other authorities have not clearly articulated that the right of digital exhaustion in the case of software which is as strong as the EU’s UsedSoft concept, is a token with them. In fact, the selling of digital software products second-hand has always been and still is for the most part regulated and restricted by the terms of the End- User License Agreements (EULAs).
This doctrinal bifurcation produces regulatory incoherence, particularly where software products cannot be meaningfully disaggregated into functional and expressive components. This method supports looking at hybrid products on a spectrum, between entirely functioning code and mainly expressive works. The paper describes a multi-factor method which takes into account the percentage of components, the level of functional integration and the typical consumer usage for identifying the main function of the product. Doing so and comparing with the present scenario in India, the paper brings to light the worldwide regulatory difficulties in finding a balance between the control of rightsholders and consumer rights in the developing digital economy. This paper argues that digital exhaustion should apply to hybrid software where functional elements predominate, and proposes a structured ‘predominant purpose test’ to guide courts.
Keywords: Digital Exhaustion, Hybrid Software, Predominant Purpose Test, and First Sale Doctrine.
