61 Reforms to C-61, Day 61: The Mysterious Section 3

The 61 reforms to Bill C-61 project concludes with one of the most puzzling provisions in the bill.  Bill C-61 adds the following to copyright owners' basic set of exclusive rights:

in the case of a work that can be put into circulation as a tangible object, to sell or otherwise transfer ownership of the tangible object, as long as the ownership of that tangible object has never previously been transferred with the authorization of the author in or outside Canada,

There is considerable debate among the copyright community about why this provision has been added and what it achieves.  At first blush, it appears to be a codification of the first sale doctrine - the notion that the copyright owner holds the right of first sale and after that the work may be resold without permission.  Another possibility is that the provision is designed to reverse the holding in Theberge, an important 2002 Supreme Court of Canada case in which the court rejected Quebec painter Claude Theberge's attempt to stop the transfer of his works from a poster to canvas on the grounds that there was no reproduction. 

The most disconcerting interpretation, however, is that it provides broad new rights over any tangible object of a work.  This could come into effect in any number of cases.  For example, consider the controversy over the sale of a handful of Harry Potter books before the release date.  This new provision could be used not only to stop the sales - the books are a tangible object never previously transferred with the authorization of the author - but could leave the sellers open to statutory damages for having infringed copyright by selling the book.  The same provision could similarly interfere with the grey market, where legally obtained copies of books, CDs, or other works in one country are stopped from sale in another country.  While some of these concerns may be legitimate, they can also typically be addressed by commercial agreement.  It is not entirely clear why we need such a significant reform to the Copyright Act to address the issue.