The Supreme Court issued at least six significant copyright decisions since 2010. My next four blogs, starting with this one, will discuss the effect of those decisions on copyright law. This blog will discuss the effect of the first-sale doctrine on works that are sold abroad and imported into the U.S.
The First-Sale Doctrine
The Supreme Court considered how the first-sale doctrine applied to books that were lawfully sold abroad and imported into the U.S. in Kirtsaeng v. John Wiley & Sons, 568 U.S. ___, 133 S. Ct. 1351, 185 L. Ed. 2d 392 (2013). The first-sale doctrine prevents the owner of intellectual-property (IP) rights from enforcing those rights against those who try to resell goods that are covered by those IP rights. In other words, this doctrine prevents IP owners from restricting future sales of lawfully purchased goods.
The Supreme Court considered a similar issue in Costco Wholesale Corp. v. Omega S.A., 562 U.S. ___ (2010). In Costco, the Supreme Court affirmed a Ninth Circuit decision that found that the first-sale doctrine did not apply to goods that were sold abroad and imported into the U.S.
The Kirtsaeng Decision(s)
In Kirtsaeng, the defendant was a native of Thailand who noticed that mathematics textbooks that were sold in Thailand were much cheaper than in the U.S. The defendant went to the U.S. to study. Then he encouraged his relatives to purchase textbooks in Thailand and send them to him for resale.
The textbook publisher sued him for copyright infringement despite the fact that the Copyright Act included an express codification of the first-sale doctrine. The textbook publisher argued that the Copyright Act included an implicit geographic limitation on the first-sale doctrine that would allow them to restrict this particular form of arbitrage that the Kirtsaeng plaintiff discovered.
The Supreme Court was unpersuaded by the publisher’s argument and held that the first-sale doctrine could apply to goods that were sold, lawfully, in foreign countries and imported into the U.S.
As indicated in my Sept. 22, 2016, blog, this case would reach the Supreme Court a second time on the issue of attorney’s fee awards in copyright cases.