U.S. Supreme Court holds that the “first sale” doctrine
applies to copies of a copyrighted work lawfully made abroad; reverses Second
Circuit to the contrary and resolves split in the Circuits on this issue
John Wiley & Sons (Plaintiff), a publisher of academic,
scientific, and educational journals and books, sells its publications
domestically and internationally. For sales in foreign countries, the Plaintiff
uses its subsidiary John Wiley & Sons (Asia) Pte Ltd. The written content
is generally similar in the books intended for domestic markets and in the
books intended for international markets, though the design and packaging may
differ. The Defendant Supap Kirtsaeng moved to the United States from Thailand
in 1997 to attend Cornell University. He later moved to California to pursue a
doctoral degree.
Between 2007 and 2008, Kirtsaeng’s friends and family
shipped the Defendant foreign editions of textbooks printed abroad by Wiley
Asia. Kirtsaeng then sold these books on eBay.com. He would repay his family
and friends for the cost of acquiring and shipping the books and keep the
profits for himself as he subsidized his education. On September 8, 2008, Wiley
filed suit against Kirtsaeng in the United States District Court of the
Southern District of New York claiming copyright infringement. Kirtsaeng
attempted to assert a defense of the first sale doctrine, but the district
court prohibited him from doing so and rejected the applicability of the
doctrine to foreign editions of textbooks not manufactured pursuant to U.S.
Copyright Act. Kirtsaeng was found liable for copyright infringement and then
appealed, claiming that the district court erred in holding that the first sale
doctrine was not an available defense.
The United States Court of Appeals for the Second Circuit
affirmed the district court’s holding that the first sale doctrine does not
apply to foreign books or copies manufactured outside of the United States.
This was a matter of first impression for this Court. The Court interpreted the
first sale doctrine, which states that the owner of a lawfully acquired copy of
a work may sell or otherwise dispose of the copy without the authority of the
copyright owner. However, § 602(a) of the Copyright Act gives copyright holders
broad control over the circumstance in which their copyrighted work may be
imported into the United States. The Court cited a recent Supreme Court opinion
in Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008), that states
that the first sale doctrine does not apply to items manufactured outside of
the United States unless they were previously imported and sold in the United
States with the copyright holder’s permission.
“Applying these
principles to the facts of this case, we conclude that the District Court
correctly decided that Kirtsaeng could not avail himself of the first sale
doctrine codified by § 109(a) since all the books in question were manufactured
outside of the United States. In sum, we hold that the phrase ‘lawfully made
under this Title’ in § 109(a) refers specifically and exclusively to copies
that are made in territories in which the Copyright Act is law, and not to
foreign‑manufactured works. . . . We freely acknowledge that this is a
particularly difficult question of statutory construction in light of the
ambiguous language of § 109(a), but our holding is supported by the structure
of Title 17 as well as the Supreme Court’s opinion in [Quality Kings
Distributors, Inc. v. L’anza Research Int’l, Inc., 523 U.S. 135 (1998)].” 654
F.3d 222.
The U.S. Supreme Court reverses. Noting all the difficulties
for international trade that would result from such interpretation, as well as
the split among the Circuits, the U.S. Supreme Court concludes that the “first
sale” doctrine applies to copies of a copyrighted work lawfully made abroad.
“¼[W]e
ask whether the ‘first sale’ doctrine applies to protect a buyer or other
lawful owner of a copy (of a copyrighted work) lawfully manufactured abroad.
Can that buyer bring that copy into the United States (and sell it or give it
away) without obtaining permission to do so from the copyright owner? Can, for
example, someone who purchases, say at a used bookstore, a book printed abroad
subsequently resell it without the copyright owner’s permission?”
“In our view, the answers to these questions are, yes. We
hold that the ‘first sale’ doctrine applies to copies of a copyrighted work
lawfully made abroad.” [Slip op. 7]
“In our view, §109(a)’s language, its context, and the
common‑law history of the ‘first sale’ doctrine, taken together, favor a non‑geographical
interpretation. We also doubt that Congress would have intended to create the
practical copyright‑related harms with which a geographical interpretation
would threaten ordinary scholarly, artistic, commercial, and consumer
activities. See Part II‑D, infra. We consequently conclude that Kirtsaeng’s
nongeographical reading is the better reading of the Act.”
“The language of §109(a) read literally favors Kirtsaeng’s
nongeographical interpretation, namely, that ‘lawfully made under this title’
means made ‘in accordance with’ or ‘in compliance with’ the Copyright Act. The
language of §109(a) says nothing about geography. The word ‘under’ can mean
‘[i]n accordance with.’ 18 Oxford English Dictionary 950 (2d ed. 1989). See
also Black’s Law Dictionary 1525 (6th ed. 1990) (‘according to’). And a
nongeographical interpretation provides each word of the five‑word phrase with
a distinct purpose. The first two words of the phrase, ‘lawfully made,’ suggest
an effort to distinguish those copies that were made lawfully from those that
were not, and the last three words, ‘under this title,’ set forth the standard
of ‘lawful[ness].’ Thus, the nongeographical reading is simple, it promotes a
traditional copyright objective (combatting piracy), and it makes word‑by‑word
linguistic sense.”
“The geographical interpretation, however, bristles with
linguistic difficulties. It gives the word ‘lawfully’ little, if any,
linguistic work to do. (How could a book be unlawfully ‘made under this
title’?) It imports geography into a statutory provision that says nothing
explicitly about it. And it is far more complex than may at first appear.”
[Slip op. 12‑13]
The Supreme Court points to the difficulties for libraries,
used‑book dealers, technology companies, consumer‑goods retailers and museums
whose activities would otherwise be hampered. How would U.S. libraries obtain
permission to circulate their estimated 200 million foreign‑printed books? How
could cars, microwaves, and mobile phones that contain copyrightable software
be imported to the U.S.? The practical problems in obtaining copyright
permission for these innumerable transactions are overwhelming.
The U.S. Supreme Court therefore reverses the Second Circuit
and remands for further proceedings.
The Dissenters find that such interpretation contravenes
Congress’ intent to protect copyright.
“’In the interpretation of statutes, the function of the
courts is easily stated. It is to construe the language so as to give effect to
the intent of Congress.’ United States v. American Trucking Assns., Inc., 310
U.S. 534, 542 (1940). Instead of adhering to the Legislature’s design, the
Court today adopts an interpretation of the Copyright Act at odds with
Congress’ aim to protect copyright owners against the unauthorized importation
of low‑priced, foreign‑made copies of their copyrighted works. The Court’s bold
departure from Congress’ design is all the more stunning, for it places the
United States at the vanguard of the movement for ‘international exhaustion’ of
copyrights—a movement the United States has steadfastly resisted on the world
stage.” [Slip op. 42]
“Rather than adopting the very international‑exhaustion rule
the United States has consistently resisted in international‑trade
negotiations, I would adhere to the national‑exhaustion framework set by the
Copyright Act’s text and history. Under that regime, codified in §602(a)(1),
Kirtsaeng’s unauthorized importation of the foreign‑made textbooks involved in
this case infringed Wiley’s copyrights. I would therefore affirm the Second
Circuit’s judgment.” [Slip op. 74]
Citation: Kirtsaeng, DBA Bluechristine99 v. John
Wiley & Sons, Inc., No. 11‑697 (U.S. March 19, 2013), reversing John Wiley
& Sons Inc. v. Kirtsaeng, 654 F.3d 210 (2d Cir. 2011).
**** Terik Hashmi is a business consultant serving businesses in the marketing realm. Among his clients are a medical service provider and an Online Reputation Management company. - Attorney Website at: https://terikhashmiattorney.com/ - Attorney Profile at: https://solomonlawguild.com/terik-hashmi%2C-esq# - Attorney News at https://attorneygazette.com/terik-hashmi%2C-consultant#eec97f53-49a0-4c94-869a-4847514cb694