Supreme Court To Decide “First Sale Doctrine”

On October 29, the US Supreme Court will hear oral arguments in the case of Kirtsaeng v. John Wiley & Sons. The case revolves around the “first sale doctrine” which allows the owner of a lawfully obtained copyrighted work to dispose of that copy without the approval of the owner of the copyright.

At issue in this case is a practice of buying cheaper foreign editions of college textbooks, then reselling them to students in the U.S. This is done under the first sale doctrine, but some copyright owners insist that federal law does not allow it.

Supap Kirtsaeng came to the U.S. from Thailand to attend college. He decided he could offset the costs of his education as a textbook dealer. His family would buy foreign editions of textbooks in Thailand and send them to him. He re-sold them to students and made a small profit.

The books sold by Kirtsaeng were published by John Wiley & Sons through an Asian subsidiary . Wiley sued him in federal court in New York, and Kirtsaeng sought to rely on the first sale doctrine. A federal judge rejected the claim, concluding that the doctrine does not apply to goods made in a foreign country. The jury found Kirtsaeng liable for infringing copyright on eight books, and found that it was an intentional violation of Wiley’s copyright. Wiley was awarded $75,000 in damages for each book, for a total of $600,000; even though Kirtsaeng only sold $37,000 worth of Wiley textbooks. The Second Circuit Court upheld the award, agreeing that the doctrine does not apply to a foreign-made product.

Three Circuit Courts have heard cases regarding the first sale doctrine, and each court has made a different ruling. The Second Circuit declaring that foreign-made works can never be resold in the U.S. without the copyright owner’s consent, the Ninth Circuit ruling that such a foreign-made product sometimes can be sold in the U.S. without permission, but only after the owner has approved an earlier sale inside the U.S., and the Third Circuit deciding that such a product can always be re-sold without permission, so long as the copyright owner had authorized the first sale that occurred overseas.

A brief filed by the American Library Association states: “By restricting the application of Section 109(a) to copies manufactured in the United States, the Second Circuit’s decision threatens the ability of libraries to continue to lend materials in their collections. ”

A brief filed by Goodwill Industries International, Inc. states: “In essence, the Second Circuit’s decision destroys first sale protection for all copyrighted works manufactured abroad [and] allows copyright holders to control the price of a foreign-produced copyrighted work no matter how many times it is resold. ”

While I do not necessarily support copyright in its current form, I do believe that the creator of content should have a say over the first sale and ONLY the first sale! Almost everything I publish, is done so under a Creative Commons License along with “copyheart.” I allow my content to be distributed by anyone under the condition that I be credited as the author/creator of the content.

I would like to see the Supreme Court make the right decision in this case, overturn the Second Circuit ruling and affirm the 1998 Quality King decision from the Ninth Circuit Court, “The whole point of the first sale doctrine is that once the copyright owner places a copyrighted item in the stream of commerce by selling it, he has exhausted his exclusive statutory right to control its distribution.”

posted by southernpatriot
  • Liberty Jack

    It’s likely they’ll uphold the lower courts’ decision against first sale from imported goods, which will only serve to ensure that companies can extract higher profits from consumers in a wealthier nation.

    Of course that will only lead to more robust black markets, but we already knew they were going to flourish in a planned economy such as this.

  • Wake Up!!!

    Re. the case before the Supreme Court, Kirtsaeng v. John Wiley & Sons

    A decision that is contrary to the established doctrine of ‘First Sale’ would have devastating economic impact throughout the economy, as noted below.

    In normal commerce, a manufacturer sells a product in large bulk quantity to a wholesale distributor, who then divides it into smaller bulk quantities and sells it to retailers. The retailers further divide the bulk and then sell the product to consumers.

    If ‘First Sale’ is not upheld, it would destroy the supply chain, requiring consumers to purchase goods directly from manufacturers, which would be extremely costly for both manufacturers and consumers.

    As an example, A consumer wanting a $20 memory module for their PC could not buy it from a company in Texas, the consumer would have to get on a plane to Taiwan to purchase the module.

    The media unfortunately have failed to note this, seeing only the impact on for example yard sales.