To the Chagrin of Copyright Holders, Consumers Win the Right to Resell Imported Books

To the Chagrin of Copyright Holders, Consumers Win the Right to Resell Imported Books

 by Sharona H. Sternberg

Just over a century ago, when buying a book for a dollar still seemed expensive, the Supreme Court first recognized the "first sale doctrine," a basic exception to a copyright owner's distribution rights. Once a consumer buys a copyrighted product, like a book, the copyright holder-whether it be the author or a publisher-has exhausted all rights to control the product's downstream distribution.

As long as the legitimate buyer does not make any copies, he is free to give away, lend, or discard his book as he pleases. Most significantly, the buyer can resell the book at any price, potentially undercutting the demand for new books sold at prices set by the original copyright owner or publisher.

Following the 1908 Bobbs-Merrill decision (Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (U.S. 1908) [an enhanced version of this opinion is available to subscribers]) and subsequent cases, the first sale doctrine was codified as 17 U.S.C.S. § 109(a) of the Copyright Act. In 1998, the U.S. Supreme Court in Quality King (Quality King Distribs. v. L'Anza Research Int'l, 523 U.S. 135 (U.S. 1998) [enhanced version])revisited the right of resale, holding that a copyrighted item manufactured in the United States but sold abroad could be legally imported and resold in the U.S. The court held that the copyright owner's importation right [17 U.S.C.S.§ 602(a)(1)] is subject to the general distribution right, which is expressly limited by the first sale doctrine. Goods can thus make the round-trip to Malta and back without the permission of the copyright holder.

The Quality Kingcourt, however, did not resolve the more common scenario in which a copyrighted product is manufactured abroad and sold abroad (often at a price lower than for the same product in the United States), and is later resold in the U.S. at a discount.

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Sharona H. Sternberg is an associate at Sunstein Kann Murphy & Timbers LLP. She concentrates in patent litigation and trademark clearance, registration and enforcement. Prior to joining Sunstein, Sharona worked at an international firm in New York City as a litigation associate with a broad-based general commercial practice including significant intellectual property experience. Her clients have included well-known pharmaceutical companies, international e-commerce companies, and financial services companies.