WASHINGTON, D.C. - (Mealey's) The U.S.
Supreme Court agreed yesterday to again address the question of whether a
foreign-made work can be resold within the United States without the permission
of a copyright holder (Supap Kirtsaeng, d/b/a BlueChristine99 v. John Wiley
& Sons Inc., No. 11-697, U.S. Sup.; See 9/2/11, Page 17).
Petitioner Supap Kirtsaeng, doing business as BlueChristine99, won certiorari
in his effort to overturn an August 2011 Second Circuit U.S. Court of Appeals
ruling [enhanced version available to lexis.com subscribers] that the
first-sale defense is unavailable to defendants who purchase copyrighted works
abroad for resale here.
review, Kirtsaeng noted that the issue presented in the instant dispute is
similar to that presented in the Supreme Court's per curiam ruling in Costco
Wholesale Corp. v. Omega S.A. (131 S. Ct. 565  [enhanced version available to lexis.com subscribers]; See 1/7/11, Page
5), which left intact a Ninth Circuit U.S. Court of Appeals decision that the
first-sale doctrine does not apply to goods that are manufactured abroad and
then imported to the United States.
Justice Elena Kagan took no part in Costco, however, leading to
a 4-4 split.
"The first-sale doctrine, codified at § 109(a), allows the owner of a copy 'lawfully made under
this title' to sell or otherwise dispose of the copy without the copyright
owner's permission. The question presented is how these provisions apply
to a copy that was made and legally acquired abroad and then imported into the
United States. Can such a foreign-made product never be resold within the
United States without the copyright owner's permission, as the Second Circuit
held in this case? Can such a foreign-made product sometimes be resold
within the United States without permission, but only after the owner approves
an earlier sale in this country, as the Ninth Circuit held in Costco? Or
can such a product always be resold without permission within the United
States, so long as the copyright owner authorized the first sale abroad, as the
Third Circuit has indicated?" Kirtsaeng's petition asks.
The Second Circuit, in affirming findings by the U.S. Court of
International Trade, found in favor of respondent John Wiley & Sons Inc., a
worldwide publisher of textbooks. Wiley obtains from authors assignment
of their U.S. and foreign copyrights of reproduction and distribution.
Wiley says the quality of its textbooks varies depending on where they are
published, with those published in the United States being "of the highest
quality." Kirtsaeng moved from Thailand to the United States in 1997 to
obtain an undergraduate degree in mathematics. In 2009, he earned a
Ph.D. Along the way, Kirtsaeng said, he received shipments of Wiley
foreign edition textbooks, printed abroad, from friends and family, as part of
what the Second Circuit called a "scheme" to "subsidize the cost of his
education." Kirtsaeng sold the foreign edition textbooks online via the
auction site eBay, using the screen name BlueChristine99.
In September 2008, Wiley filed the instant lawsuit, claiming copyright
infringement and trademark infringement. In response, Kirtsaeng claimed
that his sales were permissible pursuant to the first-sale doctrine. A
trial was held, at the conclusion of which jurors found in favor of Wiley, awarding
the respondent $75,000 for each of eight works willfully infringed by
Kirtsaeng. The first-sale doctrine, codified at Section 109(a) of the
Copyright Act, provides that "the owner of a particular copy . . . lawfully
made under this title, or any person authorized by such owner, is entitled,
without the authority of the copyright owner, to sell or otherwise dispose of
the possession of that copy," the judge noted in upholding the verdict, before
lamenting that Section
602(a) of the act "complicates matters." In that section, the
Copyright Act states that importation into the United States "without the
authority of the owner of copyright . . . of a work that has been acquired
outside the United States is an infringement of the exclusive right to
distribute copies or phonorecords."
Ruling Not Adopted
Affirming, the Second Circuit majority of Circuit Judges Jose A.
Cabranes and Robert A. Katzman cited a "key factual difference" between the
instant appeal and Quality King v. L'anza Research International Inc. (523 U.S.
135 ) [enhanced version available to lexis.com subscribers], in which
the U.S. Supreme Court held that Section 109(a) limits the scope of Section
602(a). Quality King involved copyrighted items that had been
manufactured in the United States, the panel said, and in dicta the high
court suggested "that copyrighted material manufactured abroad cannot be
subject to the first sale doctrine."
Reading the statute to mean that Section 109(a) applies only to
domestically manufactured works, the Second Circuit said that although the
Ninth Circuit ruled in Omega that Section 109(a) also applies to
foreign-produced works sold domestically, that decision relied on precedents
"not adopted by other courts of appeals."
"Accordingly, while perhaps a close call, we think that, in light of
its necessary interplay with § 602(a)(1), § 109(a) is best interpreted as
applying only to works manufactured domestically," the Second Circuit held.
Kirtsaeng is represented by Sam P. Israel of Sam P. Israel PC in New
York and E. Joshua Rosenkranz, Annette L. Hurst and Lisa T. Simpson of Orrick,
Herrington & Sutcliffe in New York. Theodore B. Olson, Matthew D.
McGill and Scott P. Martin of Gibson, Dunn & Crutcher in Washington
Lexis.com subscribers can explore/search Copyright Law resources on Lexis.com or access any of these Mathew Bender Copyright Law publications:
Non-subscribers can purchase Copyright Law
treatises/resources and Mathew Bender publications from the LexisNexis Bookstore
For more information about LexisNexis products and
solutions connect with us through our corporate
Granting Cert. Indeed! Talk about a very rare Truffle. Wow.