by Donna Ray Berkelhammer
The US Supreme Court ruled 6-3 on March 19
that once you buy a work covered by U.S. copyright law, you may
resell that product in the U.S., no matter where it was lawfully manufactured.
This is an important decision for second-hand shops, discounters, online
auction sites, museums and libraries.
The case comes from a University of
Southern California student (Supap Kirtsaeng) who had his family in
Thailand purchase Thai versions of U.S. textbooks that were manufactured
in Thailand. The books were shipped to him in the U.S., where he was able
to sell them for less than the U.S. edition and still make a profit.
He relied on the "Doctrine of First Sale under Section 109(a) of
the US Copyright Act, which says that once you buy an authorized work (perhaps
a book or a car or a laptop), you are free to resell it without worrying about
further intellectual property rights of the author/manufacturer. The
intellectual property owner is presumed to have been adequately compensated by
the first sale, and has no further rights to control or profit from later
distribution of the work. Section 109 does not mention geography at all.
Publisher John Wiley & Sons,
however, sued Kirtsaeng for copyright infringement under Section § 602(a)
of the Copyright Act, which says the exclusive right to distribute copyrighted
works is infringed if the distributor acquired those works outside the
U.S. and did not have authority to sell them here. Wiley argued that the
Doctrine of First Sale did not apply to foreign-made goods, and the district
court and Second Circuit
If this view were upheld it is possible that without
obtaining express additional authorization from the copyright owner, libraries
could not lend books published abroad, consumers could not resell cars or
laptops that contained software manufactured abroad and museums
could not display works by Picasso.
For background on the case, click here.
Different U.S. appellate courts ruled differently on
the interplay between these two sections of copyright law, which led the
Supreme Court to hear the case.
The Supreme Court determined there there is no
geographic restriction on the Doctrine of First Sale. It
acknowledged that this ruling would make it harder for copyright owners to
charge different prices in different markets, but found no basic principle of
copyright law that suggests that owners are entitled to such right.
Under this ruling, the Court held Section 602 would still
apply in cases where copies are permitted to be made abroad, but no first sale
has occurred before the permitted manufacturer, licensee or contracted party
attempts to distribute or sell the copies in the US without authorization.
a Mealey's Legal News article on this case (includes links to the opinion
and Supreme Court briefs accessible to lexisnexis.com subscribers)
Read more business law articles at North Carolina Law Life
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