By Robert R. Baron, Jr.
and Corinne Militello
A recent decision by the U.S. Court of Appeals for the Second Circuit
is a victory for copyright owners because it allows those who
manufacture outside of the United States to maintain greater control
over distribution after the first sale.
By a divided 2-1 panel, the court ruled this week in John Wiley & Sons, Inc. v. Kirtsaeng that
copyright's first-sale doctrine does not apply to copyrighted works
manufactured outside of the United States. Under the first-sale
doctrine, a copyright owner's exclusive distribution right extends only
to the first sale of a copyrighted work. After that, the purchaser can
re-sell the work freely without infringing on the copyright owner's
However, retailers and others who sell or distribute copyrighted
works should be aware that the court's ruling renders the first-sale
doctrine unavailable as a defense to an infringement claim when the copies in question were produced abroad.
In the case, publisher John Wiley & Sons alleged that Supap
Kirtsaeng, an individual residing in California, infringed Wiley's
copyrights by reselling foreign editions of Wiley textbooks, which had
been printed in Asia, without its authority. Kirtsaeng sold the
textbooks for a profit in the United States on commercial Web sites such
as eBay.com. As a defense to Wiley's infringement claim, Kirtsaeng
pointed to the first-sale doctrine.
The decision turned upon the Second Circuit's interpretation of
the statutory codification of the first-sale doctrine, 17 U.S.C. 109(a),
which provides that the doctrine applies to copies "lawfully made under
this title." Both the majority and dissenting opinions acknowledged the
ambiguity of that phrase.
The majority interpreted "lawfully made under this title" to mean
"made in the United States," where the Copyright Act is law. In a
dissenting opinion, U.S. District Judge J. Garvan Murtha argued that
such a narrow interpretation would encourage copyright owners to produce
their works outside of the United States to avoid the doctrine in order
to maintain greater control over distribution.
The case, which raised an issue of first impression in the Second
Circuit, may be appealed by the defendant, and surely will be watched
closely by both copyright owners and distributors of copyrighted works.
The issue has been examined by the Ninth Circuit, including in Omega S.A. v. Costco Wholesale Corp. [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law]. The
U.S. Supreme Court reviewed that case in late 2010 and, in a divided
4-4 decision (due to a recusal), affirmed without further analysis.
For more information on this ruling and how it might affect your
business operations, please contact Robert R. Baron, Jr., at
215.864.8335 or firstname.lastname@example.org, or Corinne Militello, at
215.864.8145 or email@example.com.
Copyright © 2011 by Ballard Spahr LLP.www.ballardspahr.com(No claim to original U.S. government material.)
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is intended to notify recipients of new developments in the law. It
should not be construed as legal advice or legal opinion on any specific
facts or circumstances. The contents are intended for general
informational purposes only, and you are urged to consult your own
attorney concerning your situation and specific legal questions you
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