LaFrance on International Exhaustion of Copyright: The Supreme Court's Decision in Kirtsaeng v. John Wiley & Sons

LaFrance on International Exhaustion of Copyright: The Supreme Court's Decision in Kirtsaeng v. John Wiley & Sons

 Excerpt:

In Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. ___, 2013 U.S. LEXIS 2371 (March 19, 2013) [an enhanced version of this opinion is available to lexis.com subscribers], the Supreme Court held that the first sale rule of copyright law applies to foreign as well as domestically made copies, thus injecting the principle of international exhaustion into United States copyright law. It remains to be seen, however, whether the copyright industries will persuade Congress to fully or partially restore the importation ban.

I. Background

While a copyright owner has the right to prevent others from selling or otherwise distributing copies of the copyrighted work under 17 U.S.C. § 106(3) [an annotated version of this statute is available to lexis.com subscribers]  , this right is limited by the first sale rule of 17 U.S.C. § 109(a) [annotated version], which permits the owner of a copy that was "lawfully made under this title" to "sell or otherwise dispose of" that copy.

The federal courts have had difficulty determining whether and when the first sale rule applies to copies manufactured outside of the United States. The statutory requirement that the copies in question be "lawfully made under this title" is susceptible to several interpretations. Because "this title" refers to Title 17 of the United States Code, which applies only within the United States, the first sale rule could apply only to copies made in the United States and its territories. Read more broadly, it could apply to any copies manufactured under conditions which would not violate Title 17 if its provisions applied to the place of manufacture. The latter interpretation encompasses many foreign-made copies, including those made under a license from the copyright owner.

In Quality King Distributors, Inc. v. L'Anza Research Int'l, Inc., 523 U.S. 135 (1998) [enhanced version], the Supreme Court held that the first sale rule applied to labels that were printed in the United States and attached to products that were sold for export. When the exported products were purchased abroad, the first sale rule allowed them to be re-imported and sold domestically without the consent of the United States copyright owner. Id. at 152. In Quality King, however, the labels in question had been "lawfully made" in the United States, where Title 17 unquestionably applies. While Quality King did not need to address the question whether § 109(a) would also permit the importation and domestic sale of foreign-made copies, the Court stated, in dictum, that it would not. Id. at 147-49.

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