Second Circuit affirms the district court’s holding that
the first sale doctrine does not apply to copies of publications manufactured
outside of the United States
Plaintiff John Wiley & Sons, 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 package may
differ. The foreign editions are demarcated with a symbol signifying that the
book may only be sold a specific country or geographic region. 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.
Allegedly, 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 then 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 affirms 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 claim is a matter of first
impression for this Court. The Court begins by interpreting 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.
The Court then begins is statutory interpretation of the
first sale doctrine by using a textual analysis of the phrase “lawfully made
under this title.” The Court focuses on the words “made” and “under.” However,
it finds that the relevant text is simply unclear. “[L]awfully made under this
title” could plausibly be interpreted to mean any number of things, including:
(1) “manufactured in the United States,” (2) “any work made that is subject to
protection under this title,” or (3) “lawfully made under this title had this
title been applicable.” 654 F.3d 220.
Since the textual analysis did not prove particularly
helpful, the Court then decides to adopt an interpretation that best comports
with the § 602(a) and the Supreme Court decision in Quality King Distributors,
Inc. v. L’anza Research International, Inc., 523 U.S. 135 (1998). By analyzing
both, the Court concluded that the best interpretation of § 109(a) is where it
only applies to copies manufactured domestically. “In adopting this view, we
are comforted by the fact that our interpretation of § 109(a) is one that the
Justices appear to have had in mind when deciding Quality King. There, the Court
reasoned, admittedly in dicta, that § 602(a)(1) had a broader scope than §
109(a) because, at least in part, § 602(a)(1) applies to a category of copies
that are neither piratical nor lawfully made under this title. That category
encompasses copies that were lawfully made not under the United States
Copyright Act, but instead, under the law of some other country.” 654 F.3d 221
(internal citation omitted).
“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 King.” 654 F.3d 222.
Citation: John Wiley & Sons Inc. v. Kirtsaeng,
654 F.3d 210 (2d Cir. 2011).
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