The doctrine of copyright exhaustion conceals a substantial and underappreciated subsidy at the heart of American copyright law. For more than a century, it has operated as a deliberate congressional scheme transferring billions of dollars in value to cultural institutions, such as libraries, museums, and galleries.<\/p>\n\n\n\n
This Essay reconceptualizes copyright law as a system of choices about when rightsholders may and may not separate purchasers based on their use. Viewed through this lens, exhaustion emerges as Congress\u2019s decision to forbid unbundling that would burden cultural institutions.It allows those institutions to acquire millions of copyrighted items at consumer prices rather than institutional premiums that unconstrained markets would demand. Legislative history, statutory design, and comparative law confirm that this subsidy was no accident but an intentional policy to support institutions that expand access to knowledge and foster our shared culture and heritage. <\/p>\n\n\n\n
That framework is now under siege. As physical books give way to ebooks, publishers circumvent exhaustion by charging libraries three to five times the retail price for temporary digital licenses. Recent judicial decisions intensify the threat by treating inflated institutional prices as the copyright owners\u2019 natural entitlement, unraveling Congress\u2019s carefully crafted scheme to secure the vitality of cultural institutions.<\/p>\n\n\n\n
The way the legal system responds to this erosion will determine whether cultural institutions endure as engines of democratic access or devolve into pay-to-play licensees in an information aristocracy where only the wealthy can fully participate in our cultural life.<\/p>\n\n\n\n