November 24, 2014

Supreme Court Asked to Review Significant First Sale Ruling

Public Knowledge (PK), the Electronic Frontier Foundation (EFF), and U.S.  Public Interest Research Group asked the Supreme Court today to review a lower court decision in the case John Wiley & Sons, Inc. v. Kirtsaeng that could have major implications for the first sale doctrine and the ability of libraries to offer foreign-made books on their shelves.

As LJ reported previously, the 2nd U.S. Circuit Court of Appeals ruled in August that Supap Kirtsaeng, a Thai man studying in the United States, infringed upon John Wiley & Sons’ copyrights when he had his family send him cheaper foreign editions of Wiley textbooks, printed by Wiley Asia, that he then resold on eBay for a profit.

Kirtsaeng has argued that the first sale doctrine gave him the right to resell the textbooks, but the U.S. District Court for the Southern District of New York ruled against this argument in October 2009 and awarded John Wiley $600,000 in statutory damages. The Second Circuit upheld that decision.

The first sale doctrine, Section 109(a) of the Copyright Act (Title 17), limits the distribution rights of a copyright owner (Section 106) and allows the owner of a copy that is “lawfully made under” the Copyright Act to sell or loan the copy without permission from the copyright holder.

However, the Second Circuit, which heard arguments in May 2010, ruled that the phrase “lawfully made under” means physically manufactured in the United States, further narrowing the applicability of the first sale doctrine, which underpins numerous secondary markets, including the ability of libraries to loan books.

Kirtsaeng is now asking the Supreme Court to review the Second Circuit’s decision, arguing that copies “lawfully made under this title” include all copies made legally (according to Title 17), regardless of where the copies were manufactured.

The amicus brief filed today by the three organizations supports Kirtsaeng’s argument. The brief reads in part:

Libraries, which rely heavily upon the first sale doctrine to lend copies of books to the public, are especially vulnerable under the Second Circuit’s stripped-down version of Section 109(a). Without the protection of Section 109(a) for foreign-printed books, libraries could be forced to affirmatively research the place of manufacture for every book they acquire, even if that acquisition is completed within the United States, and either refuse to stock foreign manufactured copies of books or seek countless licenses from copyright owners to offer those books to the public.

In a blog posting, Jodie Griffin of Public Knowledge called upon the court to use the Kirtsaeng case as an opportunity to clarify the growing number of contradictory decisions that have been issued regarding the first sale doctrine:

For example, the Ninth Circuit has held that the first sale doctrine does apply to foreign-made copies if the copyright owner has sold the copy within the U.S., but the Supreme Court tied 4-4 when it tried to resolve the question, and the Second Circuit has explicitly rejected the Ninth Circuit’s approach. The Court should resolve this circuit split and protect consumers’ ability to sell, lend, and give away their own personal property.

Michael Kelley About Michael Kelley

Michael Kelley (mkelley@mediasourceinc.com) is the former Editor-in-Chief, Library Journal.

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Comments

  1. curious. if we use the Second Circuit decision, then publishers of books printed outside the U.S. forfeit their Copyright protections? if books are not manufactured in the U.S., then are they “lawful” copies? and if unlawful copies, do they lose the protections offered to lawfully manufactured books, CDs, DVDs, and even any printed matter that bears the mark “printed in China” such as Copyright protected product descriptions, and even the Omega watch logo that started this whold thing, etc.? (if the Omega logo that is only manufactured in Asia keeps the buyer from benefiting from “first sale” because the logo/watch wasn’t “lawfully made” then can I make counterfeit copies of the Asian Omega because it’s not a lawful product?) — sheesh. glad ianal

  2. Bradley A. Scott says:

    Standard disclaimer: not a lawyer, yada yada. But I can read and apply some judgement, and after reading this article I wonder whether a ruling supporting Wiley (the publisher) in this case could effectively abolish the right of first sale for most published material, and with it the ability of libraries, secondhand sellers, and media-rental businesses (such as Netflix) to exist.

    The article describes how supporting the publishers in this case, and abolishing the right of first sale for items manufactured outside the United States, could make it illegal for secondhand sellers, libraries or rental businesses to make copies of those materials available to the public. This is bad enough. But it could have even more insidious results.

    If you are a publisher and you want it to be illegal for purchasers of your product to resell it on the secondhand market, loan it to their friends, or circulate it via a library or rental collection, the right of first sale is your enemy. Therefore: If the right of first sale does not apply to items manufactured outside the United States, then the obvious strategic response is to move all your printing and manufacturing processes outside the United States, so that you can prohibit the resale or rental of those items.