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


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).


**** 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

Terik Hashmi, Attorney at Law, Legal Commentary

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