On March 19, 2013, the Supreme Court issued its opinion in Kirtsaeng v. John Wiley & Sons, Inc. In a 6-3 decision, the Supreme Court reversed the 2nd Circuit and held that “the ‘first sale’ doctrine applies to copies of a copyrighted work lawfully made abroad.” The first sale doctrine generally allows the owner of a copy of a copyrighted work to sell, lend or otherwise dispose of the copy. This case allowed the Supreme Court to re-examine the same issue that it first faced in Costco Wholesale Corp. v. Omega, S.A. in 2010. In Costco, an equally divided Supreme Court upheld the 9th Circuit’s holding that the “first sale” doctrine applied only to copyrighted materials made within the United States. Therefore, the first sale doctrine was inapplicable to the resale of copyrighted materials made and distributed outside the United States, and thus the unauthorized importation into the United States of copyrighted materials made outside the United States was prohibited.

However, as Justice Kagan did not participate in the decision, the net effect was to uphold the appellate court’s decision, without setting precedent. Kirtsaeng v. John Wiley & Sons, Inc. allowed the Supreme Court to finally put the issue to rest.

In Kirtsaeng, John Wiley & Sons, Inc., publishes academic, scientific, and educational journals and books, including textbooks, for sale in domestic and international markets. Wiley’s wholly-owned subsidiary, John Wiley & Sons (Asia) manufactures books for sale in foreign countries. While the content of these cheaper books are similar, the foreign manufactured books usually differ in their supplemental content, as well as type and quality of materials. The books further contain the designation that they are authorized only for sale in Europe, Asia, Africa and the Middle East. To help subsidize the cost of his education, Supap Kirtsaeng, originally of Thailand, had his friends and family ship him foreign edition books manufactured by Wiley Asia that he would then sell on websites such as eBay.com.

Wiley filed a copyright infringement action in the Southern District of New York against Kirtsaeng, alleging that Kirtsaeng violated Wiley’s exclusive rights to import copies into the United States. Kirtsaeng appealed the court’s refusal to allow jury instructions charging that the first sale doctrine was a defense in this case. The 2nd Circuit affirmed the court’s decision, focusing on the statutory language “lawfully made under this title” of Section 109(a). Section 109(a) reads in relevant part:

Notwithstanding the provisions of section 106(3), the owner of a particular copy […] lawfully made under this title […] is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy[.]

The Supreme Court held that the most natural construction of “lawfully made under this title” was, as the dissent from the Second Circuit argued, “made in compliance with this title,” rather than a particular location of manufacture (within the United States or abroad).

The Supreme Court rationed that anything contrary would send all consumers racing to trace title for books and other copyrighted materials purchased abroad to request permission to import the same. Among the practical examples given by the Court were those of libraries that have purchased books published abroad, and a tourist buying a book abroad to give to a friend.

Thus, the Supreme Court adopted the principle of international copyright exhaustion, which allows that the first sale doctrine is applicable to all lawfully made copies, made anywhere in the world.

Sources: http://www.wnlaw.com/ip-law-news/u-s-supreme-court-holds-that-copyright-is-subject-to-international-exhaustion/ http://www.supremecourt.gov/opinions/12pdf/11-697_d1o2.pdf http://www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/

For more information on this topic, visit our copyright service page.

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