The Lawletter Vol 38 No 4
Under the "first sale doctrine," the owner of a copyrighted item, such as a book or a recording, is free to use it, sell it, lend it, or give it away under whatever conditions the owner chooses to impose. This doctrine derives from a long line of jurisprudence, see Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908), and is now embodied in the Copyright Act, 17 U.S.C. § 109(a) ("[T]he owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord."). Until now, the extent of the application of the first-sale doctrine to books sold overseas and then imported into the United States remained an open question.
Kirtsaeng v. John Wiley & Sons, 133 S. Ct. 1351 (2013), has now resolved that question. John Wiley & Sons, Inc., an academic textbook publisher, often assigns to its wholly owned foreign subsidiary (Wiley Asia) rights to publish, print, and sell foreign editions of Wiley's English-language textbooks abroad. Wiley Asia's books state that they are not to be taken (without permission) into the United States. When Supap Kirtsaeng moved from Thailand to the United States to study mathematics, he asked friends and family to buy foreign edition English‑language textbooks in Thai book shops, where they sold at low prices, and to mail them to him in the United States. He then sold the books, reimbursed his family and friends, and kept the profit. Wiley sued Kirtsaeng, claiming copyright infringement.
Wiley prevailed in the district court and in the Second Circuit. The Supreme Court reversed. The majority in a 6-3 decision concluded that nothing in the language of the statute would require that copyrighted works imported from overseas should be treated any differently than goods that are initially sold domestically. Furthermore, as a practical matter, an application of the Copyright Act that would require buyers of copyrighted works to ascertain their provenance is simply unworkable. The volume of foreign trade in which the United States engages is simply too large for enforcement to be feasible. The burden of requiring those importing copyrighted goods into this country for a variety of purposes, such as exhibitions of works of art or acquisitions by museums, to seek out the copyright owners to obtain a license would be onerous. Thus, an interpretation of the Copyright Act that would treat goods initially acquired outside the United States differently from those that are acquired domestically, for purposes of the first-sale doctrine, would be unenforceable.
Justice Ginsburg, writing for the dissenters, disagreed with the majority's reading of the statute. She would not draw a legal distinction between goods lawfully made in the United States and then reimported into the United States, and goods, such as Wiley's, that were not "lawfully made" in the United States but, instead, were made exclusively for sale overseas and thus were beyond the reach of U.S. law. In neither case would the first-sale doctrine immunize the importer from liability for infringement. Dicta in Quality King Distributors, Inc. v. L'anza Research Int'l, Inc., 523 U.S. 135 (1998), had suggested that if the issue were squarely presented, the Court would not find the distinction persuasive either. If the two situations were treated similarly, the first-sale doctrine would not have applied to insulate Kirtsaeng's sale of the books from liability for copyright infringement. The majority, however, declined to follow that dicta. Justice Ginsburg disagreed with their reasoning and did not accept that the factual distinction had legal significance for purposes of copyright infringement. Moreover, she was not persuaded by the rationale of impracticable enforcement but, instead, would defer to what she considered the literal language chosen by Congress in enacting the Copyright Act.
In the most general terms, this case represents a further erosion in the scope of protection that is claimed by copyright owners under the Copyright Act. Publishers and others have tended to take the Court to task for narrowing that protection and putting this country's intellectual property further at risk from infringement. Only time will tell if those concerns are well founded.