The “first sale” doctrine plays an important role in copyright and trademark law by limiting certain rights of a copyright or trademark owner. The doctrine enables the distribution chain of copyrighted products, library lending, gifting, video rentals and secondary markets for copyrighted works (for example, enabling individuals to sell their legally purchased books or CDs to others). In trademark law, this same doctrine enables reselling of trademarked products after the trademark holder put the products on the market. The doctrine is also referred to as the "right of first sale," "first sale rule," or "exhaustion rule."

Copyright law grants a copyright owner an exclusive right “to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” 17 U.S.C. 106(3). This is called “distribution right” and differs from the copyright owner’s “reproduction right” which involves making copies of the copyrighted works. Rather than the right to copy, the distribution right involves the right to transfer physical copies or phonorecords (i.e., recorded music) of the copyrighted work. For example, the distribution right could be infringed when a retailer acquires and sells to public unlawfully made audio or video tapes. Although the retailer may not have copied the work in any way and may not have known that the tapes were made unlawfully, he nevertheless infringes the distribution right by the sale. The distribution right allows the copyright owner to go after any member in the chain of distribution.