First Sale in Copyrights – Supreme Court takes a Fresh Look

On March, 19 2013, the Supreme Court held that the “first sale” doctrine, which allows the owner of a copyrighted work to sell or otherwise dispose of that copy as he wishes, applies to copies of a copyrighted work lawfully made abroad. In a six to three decision, the Court reversed previous lower court rulings and ruled in favor of defendant, Supap Kirtsaeng.

While studying in the United States, Thailand native, Kirtsaeng asked friends and family in Thailand to buy copies of textbooks and ship them to the United States to sell for profit. Kirtsaeng was sued by John Wiley & Sons, Inc. for violating its copyright protection.

The issue at hand is whether the first sale doctrine applies to copies of copyrighted works produced outside of the United States but imported and sold in the United States. Under 17 U.S.C. §602(a), “importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies.” However, the “first sale” doctrine in the Copyright Act states that “the owner of a particular copy or phonorecord lawfully made under this title…is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy” (17 U.S.C. §109(a)).

Much of the rulings of this case were based off of the Court’s decision in Quality King Distributors, Inc v. L’anza Research International Inc. 523 U.S. 135, 118 S.Ct. 1125, 140 L.Ed.2d 254 (1998). In this case, the Supreme Court held that §109(a) limits the scope of §602(a). However, in the case of Quality King, the copyrighted products had all been manufactured in the United States.

Previously, the District Court and the Second Circuit had held that Kirtsaeng was not protected under the “first sale” doctrine as it does not apply to foreign-manufactured goods. Both courts had interpreted the words “lawfully made under this title” as to restrict the scope of §109(a)’s “first sale” doctrine geographically.

The Supreme Court overturned this decision based on a non-geographical interpretation of the “first sale” doctrine. The Court agreed with Kirtsaeng as to say that the words “lawfully made under this title” meant that it was made “in accordance with” or “in compliance with” the Copyright Act. This meant that the “first sale” doctrine applies to copyrighted works as long as their manufacture met the requirements of American copyright law. Specifically, it applies where copies are manufactured abroad with the permission of the copyright owner. The Supreme Court believes that a nongeographical interpretation promotes a traditional copyright objective by combatting piracy, and it makes word-to-word linguistic sense. On the other hand, a geographical interpretation would be filled with linguistic difficulties and complications.

Additionally, the Supreme Court states that it “doubt[s] that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities.” (Kirtsaeng v. John Wiley & Sons, Inc. 133 S. Ct. 1351 (2013)).