March 19, 2013
Supreme Court Action: Kirtsaeng Case Holds First Sale Doctrine Applies to Foreign Made Books
The Supreme Court decided Kirtsaeng v. John Wiley & Sons, Inc. (11-697) this morning. The case concerned the application of the first sale doctrine to books and other materials manufactured outside of the United States. Supap Kirtsaeng imported Wiley’s textbooks manufactured in Thailand and resold them in the United States. Wiley sold the same textbook at a much higher price. Wiley asserted rights under §602(a) and §106 of the Copyright Act which gave exclusive rights to the publisher and allowed controls on the importation of those foreign made goods. Kirtsaeng argued that the first sale doctrine codified in §109 altered those rights. The District Court would not let him assert the first sale doctrine as a defense as it concluded the doctrine did not apply to foreign made goods. The Second Circuit affirmed that decision.
The Supreme Court reversed, holding that the doctrine does indeed apply to foreign manufactured goods. The Court examined words of the statute, “lawfully made under this title,” and concluded that there was no geographic limitation on the application of the statute. Other courts have adopted the geographical limitations on the application of the Copyright Act, though the Court said a common sense reading of the statutory text belies that:
In our view, §109(a)’s language, its context, and the common-law history of the “first sale” doctrine, taken together, favor a non-geographical interpretation. We also doubt that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities. See Part II– D, infra. We consequently conclude that Kirtsaeng’s nongeographical reading is the better reading of the Act.
The Court examined the dictionary meanings of the words, the history of the Copyright Act, the historical development of the first sale doctrine and concluded that Congress did not have geography in mind when it wrote the present version of the Act.
The Court specifically mentions the possibility that libraries may be restricted in loaning books that were manufactured outside of the United States, per the American Libraries Association brief. Other amici raised similar issues for foreign-made goods with microchips containing copyrighted code embedded in them. The Court noted that while there haven’t been harms to consumers so far, that could change if the decision went in favor of Wiley. Justice Breyer delivered the opinion of the Court which was joined by Chief Justice Roberts and Justices Thomas, Alito, Sotomayor, and Kagan. Justice Ginsburg dissented and was joined by Justices Kennedy and Scalia. Justice Scalia declined to join Parts III and V-B-1 of the dissent ostensibly because those parts referred to legislative history.
I’ll have more to say about this decision in the next day. For further information, read my LLB posts The Deeper Implications Of The Pending Kirtsaeng Case and The Kirtsaeng Oral Argument. [MG]