Why is this important to me?
Under
the first
sale doctrine,
the owner of a copyrighted work "lawfully made under" U. S. copyright law can
"sell or otherwise dispose of" it without getting permission from the holder of
the copyright. Basically, if you legally purchased a Aerosmith CD in the
United States, you're free to lend it to a friend or sell it at your garage
sale. However, there is a separate
provision of U.S. copyright
law that prohibits the importation into the United States of copies of a work
‘acquired outside the U.S. Even though Aerosmith and their record label are
American, the company that manufactured the CDs might be foreign.
Who would have
thought that selling textbooks on eBay would result in a copyright dispute that
is now being decided by the U.S. Supreme Court?
It happened to
Supap Kirtsaeng, a graduate student who arranged to import textbooks legally
purchased in his native Thailand and then resold them to U.S. buyers on eBay to
help pay for his school expenses. The publisher, John Wiley & Sons, filed a
lawsuit, arguing that the first-sale doctrine — the right to resell copyrighted
works purchased in a legitimate transaction without first obtaining permission
from the rights owner — does not apply to works purchased overseas in a
so-called gray market.
Because
the books weren't made in the U.S., a federal judge rejected Kirtsaeng's claim
that he was protected under the first-sale doctrine. The U.S. 2nd Circuit Court
of Appeals agreed. The appeals court cited a provision in the Copyright
Act of 1976 that limits the
first-sale doctrine to goods "lawfully made under this title." The panel said
foreign-made goods don't fit that description.
Federal law states that the owner of
any lawfully made copy of a work may "sell, display or otherwise dispose of
that particular copy" without the copyright owner's authorization. But the law
also states that importing copies made overseas violates the copyright owner's
exclusive right to distribute that work in the U.S., with limited exceptions.
The
outcome of this decision could affect the future of second-hand sales of other
intellectual property that is copyright-protected. eBay joined the Owners' Rights Initiative (ORI), a
coalition advocating for a liberal interpretation of the first-sale doctrine,
cautioning that a ruling against Kirtsaeng would result in a substantial
restriction of the flow of commerce.
Andrew
Shore, executive director of the Owners' Rights Initiative, said in a statement he "hopes that
the Supreme Court will take this opportunity to defend owners' rights and
clarify that if you buy something, you own it." Shore said a ruling in favor of
Wiley means "libraries may be unable to lend books, individuals could be
restricted from donating items to charities, and businesses and consumers could
be prevented from selling a variety of products" like books, electronics or
used cars.
"Just
as the music industry once limited itself to going after only extreme cases of
individuals who illegally downloaded music, the potential is there for this
case to pull in a wide swatch of Americans who resell used books and other
copyrighted material. The police officer or prosecutor who wants to exert
leverage on someone could have this tool at his or her disposal, depending on
the outcome of the Court case," says attorney Martin Sweet of legal information
website THELAW.TV.
Kirtsaeng's attorney argued that allowing
copyright holders to sue would give them "endless, eternal downstream control
over sales and rentals" of their goods, while also encouraging companies to
send manufacturing overseas. Manufacturers balk at the gray market because
it undercuts their U.S. sales.
The
Association of American Publishers filed
an amicus brief supporting
Wiley's position.
"There has been a
great deal of ill-founded speculation and fear-mongering about the potential
consequences of this case, mainly driven by retail and digital industries whose
business models are built on the availability of an unlimited marketplace for
used products," the group stated. "And there's also a big difference between
your resale of a book or device purchased in the U.S. and produced for the U.S.
market as compared to hugely-profitable businesses such as Supap Kirtsaeng's
which are created and operated on a mass scale of copyright infringement."
The high court is
expected to deliver its ruling next year.
