First Sale Imports
Kirtsaeng v. John Wiley & Sons, Inc., resolved the collision of three sections of the Copyright Act: 17 U.S.C. §§106(3) (exclusive rights); 109(a) (first sale exception); and 602(a)(1) (importation restriction).
Supap Kirtsaeng, a citizen of Thailand, came to the United States in the late 90s to study at Cornell. When he completed his studies at Cornell he went on to earn a Ph.D. in mathematics at USC. He eventually returned to Thailand to teach, which was required by a scholarship he received from the Thai government. While in the United States, Kirtsaeng had his friends and family in Thailand buy copies of foreign edition English language textbooks at low prices and mail them to him in the United States where he sold them for profit. In 2008, John Wiley & Sons, Inc., brought a lawsuit against Kirtsaeng for copyright infringement.
The parties’ arguments revolved around the meaning of the phrase “lawfully made under this title” as it appears in the §109(a) codification of the aged common law first sale doctrine. Wiley argued for a geographical interpretation, confining the first sale exception to works made in the United States. Of course, that reading squarely conflicts with the geographic equalization of the copyright regime by excision of the manufacturing clause in the 80s. The Court wrote that Wiley’s reading “bristles with linguistic difficulties” and instead held that the operative phrase merely means “in accordance with” or “in compliance with” the Copyright Act. Common sense prevails in language and policy, though at the expense of foreign price discrimination.
It remains to be seen how the market will absorb this ruling, and in particular whether domestic textbook pricing will be sanitized.
The American Library Association chimed in as an amicus to point out that our library collections contain at least 200 million books published abroad, the circulation of which would come into question should Wiley’s reading of §109(a) take hold. Other practical problems were paraded.
Of note, the Lord Coke quote cited by the Court in support of its first sale interpretation is worth repeating here.
[If] a man be possessed of . . . a horse, or of any other chattell . . . and give or sell his whole interest . . . therein upon condition that the Donee or Vendee shall not alien[ate] the same, the [condition] is voi[d], be cause his whole interest . . . is out of him, so as he hath no possibilit[y] of a Reverter, and it is against Trade and Traffi[c], and bargaining and contracting betwee[n] man and man: and it is within the reason of our Author that it should ouster him of all power given to him.
A patch of legalese c. 1628 that’s easy to appreciate.
Update: January 18, 2016
Petitioner, Supap Kirtsaeng, seeks attorney fees under 17 U.S.C. §505, which provides that a “court may . . . award a reasonable attorney’s fee to the prevailing party”, and the standard for awarding such fees is being reviewed by the U.S. Supreme Court. The petitioner claims the appellate circuits are split on the interpretation of §505, namely that a party who would prevail in one court of appeals would lose in another only because the law applied by each differs.