Mar 20, 2013

Supreme Court Rules that the Copyright “first sale” Doctrine Applies to Copies of a Copyrighted Work Lawfully Made Abroad

Kirstsaegn v. John Wiley & Sons, Inc., 568 U.S. _, No. 11-697 (Mar. 19, 2013)

On Tuesday, March 19, 2013, the Supreme Court ruled that the “first sale” doctrine applies to lawful sales that have occurred outside of the United States.  The 6-3 majority reversed a prior ruling by the Second Circuit that the “first sale” doctrine applied only to goods made in the U.S. This ruling clarifies that U.S. copyright owners may not stop others from importing and re-selling copyrighted content that was lawfully purchased outside of the U.S.

The Copyright Act grants the owner of a copyright the exclusive right to distribute copies of the copyrighted work, and makes importing a copy made abroad without the copyright owner’s permission an infringement of the owner’s copyright.  However, this exclusive right is qualified by several limitations, including the “first sale” doctrine, which provides that the owner of a lawfully made copyright-protected item is entitled to sell or otherwise dispose of the possession of that item as he or she see fit. 

The issue addressed in this case was whether Supap Kirtsaeng, a Thai student at Cornell University, was free to resell lawfully purchased books from Thailand in the United States.  Specifically, Kirtsaeng had friends buy foreign edition English-language textbooks from Thai book shops (where they were sold at lower prices than U.S. bookstores) and send them to him for re-sale in the U.S.  Some of the books that Kirtsaeng sold were published by a wholly-owned subsidiary of John Wiley, & Sons, Inc. (“Wiley”) that had the rights to publish, print, and sell editions of Wiley’s English language textbooks outside of the U.S.  

Wiley sued Kirtsaeng for the unauthorized importation of its books and his re-sale of the books, which Wiley claimed were copyright infringements as well as a violation of the prohibition of importation of copyright-protected items without the copyright holder’s permission.  Kirtsaeng responded that the foreign books were lawfully made and acquired legitimately, so the “first sale” doctrine applied.  Both the District Court and the Court of Appeals found that the “first sale” doctrine did not apply because the books were foreign-manufactured goods, and the “first sale” doctrine does not apply to copies of American copyrighted works manufactured abroad. 

The Supreme Court, however, focused on whether the phrase “lawfully made under this title,” found in the first-sale doctrine limitation section of the Copyright Act, restricted the scope of the “first sale” doctrine geographically.  In other words, does the “first sale” doctrine only apply to goods lawfully made in the U.S., or does it extend to all goods that were lawfully made under the U.S. Copyright Act, regardless of the place of manufacture?  The Supreme Court sided with Kirtsaeng, stating that the “first sale” doctrine extends to all goods that were lawfully made regardless of place of manufacture because of: (1) the language of the Copyright Act, (2) the historical and contemporary statutory context of the Copyright Act, (3) statutory interpretation canons regarding common law, and (4) the impact that adopting Wiley’s position would have on basic constitutional copyright objectives, namely, promoting the progress of science and the useful arts, based upon the deeply embedded reliance of the “first sale” doctrine in the practices of booksellers, libraries, museums and retailers.

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