Is a person who lawfully obtains a book from overseas allowed to redistribute the book in the United States without paying royalties to the original copyright owner?

That is the question the Supreme Court addressed in its ruling in Kirtsaeng v. John Wiley & Sons, Inc., which issued on March 19, 2013. The Supreme Court held that a purchaser is protected under the “first sale” doctrine of copyright law when reselling a copyrighted work in the United States provided it was lawfully manufactured and purchased abroad.

Kirtsaeng, a foreign student studying in the United States as a graduate student, had his friends and family in Thailand buy copies of English language textbooks produced for sale outside the United States from Thai book stores, where prices were low compared to U. S. book stores. He would then have the books mailed to him in the United States where he would resell them, reimburse his family and friends, and keep a profit.

John Wiley & Sons, publishers of some of the books Kirtsaeng resold, sued him for the unauthorized distribution of copyrighted works. Kirtsaeng argued Wiley’s distribution rights had been “exhausted” in the first sale which occurred overseas where the books were printed by one of Wiley’s subsidiaries. The “first sale” doctrine in U. S. copyright law provides that once a copyright holder sells a copyrighted work, subsequent owners may sell or otherwise transfer that copy of the work as they wish. The original distribution rights in that copy have been “exhausted.” Wiley countered that the first sale doctrine did not apply to copies of works made outside the United States.

Kirtsaeng lost in the lower courts, but in a 6-3 decision authored by Justice Breyer, the Supreme Court reversed stating that the “first sale” doctrine applies to copies of copyrighted works lawfully made abroad. In the Court’s view, the Copyright Act, “its context, and the common-law history of the “first sale” doctrine, taken together, favor a non-geographical interpretation” which meant a “first sale” abroad exhausted distribution rights in the work in the United States as well. The Court said reading a geographical restriction into the statute created “linguistic difficulties” creating more confusion than it solved. The court also stated it was doubtful “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.” Among these harms, the Court examined a number of what it believed would be excessive restraints on free commerce likely to result from libraries, bookstores, tourists, and others having to obtain permission to later resell a book printed and obtained lawfully overseas.

If you have any questions regarding this case or any other copyright related matters, please contact us here at Woodard, Emhardt, Moriarty, McNett & Henry LLP.