The digital shift in distribution, from markets premised on disposing of physical
artifacts to markets defined by data flows, is among the most important changes in the
copyright landscape since the enactment of the 1976 Copyright Act. The disconnect between
this new reality and our current statutory rules is particularly evident when it comes to the
question of exhaustion. The first sale doctrine embodied within Section 109 was constructed
around a mode of dispossession that is rapidly becoming obsolete. As a result, the benefits
and functions it has long served in the copyright system are at risk. Building on our earlier
work, this Article will argue that a meaningful exhaustion doctrine should survive the digital
transition. After explaining the two primary hurdles to digital exhaustion under the existing
statutory regime, we outline two possible approaches to legislating digital exhaustion,
concluding that a flexible standards-based approach that vests considerable authority with
the courts is the better solution.