The United States Supreme Court has agreed to hear a case on whether or not it is legal to purchase copyrighted materials manufactured outside the United States and resell them in the U.S. without the permission of the copyright owner. The case is Kirtsaeng v. John Wiley & Sons and involves a Thai National who attended school in the U.S. Kirtsaeng thought to help pay for his education by having his family purchase overseas editions of textbooks and send them to him in the U.S. where he then sold them to fellow students for a profit. Wiley, the publisher of the textbooks, sued Kirtsaeng in federal court in New York for copyright infringement. Kirtsaeng claimed that his activities were covered by the first sale doctrine of the U.S. Copyright Act. However, the jury disagreed and found him guilty of copyright infringement on eight books and awarded Wiley $75,000 for each book for a total of $600,000. Kirtsaeng appealed but the Second Circuit agreed with the lower court that the first sale doctrine does not apply to goods made in a foreign country.
The Circuit Courts have now split three ways on this issue. As indicated above, the Second Circuit has ruled that copyrighted works manufactured outside the U.S. can never be resold in the U.S. without the copyright owner’s permission. The Ninth Circuit takes a slightly different approach. They ruled that a foreign work can be resold in the U.S. without permission but only after the copyright owner has approved a prior sale inside the U.S. The Third Circuit has ruled that foreign works can be resold in the U.S. without permission provided that the copyright owner authorized the first sale of the work wherever the work was manufactured. The U.S. Supreme Court did review this issue with the Ninth Circuit case of Costco v. Omega but the Court split with a 4-4 tie. Justice Elena Kagan had to recuse herself since she was involved in the case prior to becoming a Supreme Court justice. When the U.S. Supreme Court splits on a decision, then the Circuit Court decision stands.
This case has the potential to greatly impact how libraries do business. Many of the books libraries purchase are manufactured outside of the United States. Libraries rely upon the first sale doctrine of the U.S. Copyright Act to loan those books. First sale allows the copyright owner to determine when their work will be made available to the public but once that occurs then the copyright owner does not have any control over the resale or the loan of their work. This is how libraries and used book stores can stay in business.
The Supreme Court will hear oral arguments in the fall with a ruling to follow in June 2013.
Copyright in the News is written by University Copyright Office Director, Donna Ferullo. www.lib.purdue.edu/uco