Last week, the United States Supreme Court decided Kirtsaeng, dba BlueChristine99 v. John Wiley & Sons, Inc., 568 U.S. ____ (2013), recognizing the right of Petitioner, a Thai student studying in the United States, to import textbooks and resell them here, under the “first sale” doctrine, notwithstanding Respondent’s exclusive distribution rights under the Copyright Act.
The exclusive right a copyright owner enjoys to distribute copies of a copyrighted work, 17 U.S.C. §106(3) (including importation of copies acquired outside the U.S., see §602(a)(1)), is subject to §§107-122 of the Copyright Act, including the “first sale” doctrine, which provides that “the owner of a particular copy or photo record lawfully made under this title … is entitled … to sell or otherwise dispose of the possession of that copy or photo record.” §109(a) (emphasis added).
John Wiley & Sons, an academic textbook publisher, often assigns rights to publish, print and sell foreign editions of its English language textbooks abroad to its wholly-owned foreign subsidiary, Wiley Asia. Wiley Asia’s books state that they are not to be taken into the United States without permission. Supap Kirtsaeng, a mathematics student at Cornell, asked friends and family to buy foreign edition, English language textbooks in Thai bookshops, where they were cheaper, and send them to him. He then sold the books in the United States, keeping the profit.
Wiley sued Kirtsaeng, claiming his unauthorized importation and resale of books infringed its exclusive right to distribute copies (including by importation). Kirtsaeng responded that because the books were “lawfully made” and legitimately acquired, the “first sale” doctrine permitted their importation and resale without permission from Wiley as copyright owner. The U.S. District Court held and, on appeal, the Second Circuit affirmed that the “first sale” doctrine does not apply to copies of American copyrighted works manufactured abroad.
By a 6-3 margin, the Supreme Court reversed, holding that Wiley’s attempt to read a geographical limitation into the “first sale” doctrine (thereby excluding Wiley Asia’s books from its effect) was unavailing. The majority concluded that statutory language of §109(a), its context and the “first sale” doctrine’s common law history favor Petitioner Kirtsaeng’s reading. Library associations and other amici also argued that a geographical limitation on the “first sale” doctrine would disserve the basic Constitutional objective of copyright — i.e., “promoting the progress of science and the useful arts” — and would likely require libraries to secure permission from copyright owners before circulating books in their collections that are printed overseas.
Early reactions to the decision suggest that this construction of copyright’s “first sale” doctrine (analogous to the doctrine of patent exhaustion) means that authorized distribution of a copy anywhere in the world exhausts a domestic copyright owner’s distribution right in the United States regarding that copy. While this will presumably benefit consumers by placing lower priced imports into domestic trade, it may also discourage publishers from distributing works abroad in the first place, particularly at lower prices. Further consequences could include greater reliance on trademark law as a means of excluding parallel (so-called “gray”) market imports, and accelerating the growth of content licensing (especially in digital form), rather than sale, as a dominant form of commercial transaction for copyrighted works.