Scotus Gets One Very Right

They reaffirmed the right of first sale of a copyrighted work:

The Court at last seems to have reached a consensus on a seemingly intractable problem of copyright law: whether a U.S. copyright holder can prevent the importation of “gray-market” products manufactured for overseas markets.  When the Court tried to address this question two Terms ago – in Costco Wholesale Corp. v. Omega, S.A. – the Court was equally divided (with Justice Kagan recused).  However, in today’s opinion in Kirtsaeng v. John Wiley & Sons, Inc., Justice Breyer, writing for a strong majority of six, emphatically rejected the publisher’s control over the importation of such products.

The facts are almost too good to be true.  A Thai national (Kirtsaeng) came to this country to study at Cornell and U.S.C.  To subsidize his educational expenses, he resold textbooks purchased by his family at bookstores in Thailand.  All in all, he sold several hundred thousand dollars’ worth of textbooks imported in this way, reaping a net profit in the range of $100,000.  When his activities came to the attention of Wiley (a major American textbook publisher), a suit for copyright infringement predictably ensued.  The district court found for Wiley and imposed statutory damages of $600,000.   The Second Circuit affirmed.

The case turns on a provision of the Copyright Act that permits the owner of a copy that was “lawfully made under this title” to resell the work. The publisher argues that the Thai books, printed in Thailand, were not made “under this title,” and thus that Kirtsaeng cannot lawfully resell them. Kirtsaeng, on the other hands, argues that the books were “lawfully made,” because they were made under a license from Wiley.

………

The issue in Kirtsaeng was whether the first-sale doctrine applies to copyrighted works manufactured overseas. Kirtsaeng bought textbooks in Thailand, where they are cheap, brought them to the United States, and resold them at a large profit. The lower courts said he couldn’t do this, and ordered him to pay damages to the publisher (John Wiley). The Supreme Court disagreed. The Justices said that the first-sale doctrine applies to all books, wherever made. So even if you buy a book made in England, you can resell it without permission from the publisher.

Normally, this is a close thing, but this time it was 6-3, and the opinion was strident, describing the consequences of ruling for the publisher to be a, "parade of horribles", where people owning foreign made cars, or tablets, or cell phones would need permission from the publisher in order to resell the products.

I also think that the court was aware that if they allowed the restriction on the right first sale, that the copyright holders would set up manufacturing offshore so as to extort additional revenue by prohibiting resales, or demanding blackmail money licensing fees.

Rather unsurprisingly, the dissent was written by Ruth Bader Ginsburg, who never saw a draconian power that she did not want to give IP holders.

As an aside, we are seeing a change in the public view of IP. 

The Supreme Court, with this decision, did not ask, "How can we stop piracy of protected works," but instead asked, "What are the reasonable limits to the exclusive license we grant to IP holders."

This is a rather significant change in the tenor of the discussion, and we not just seeing it at the Supreme Court, but among an increasing number of Congressmen.  (The White House is still firmly in the pocket of the the MPAA, the RIAA, and the rest of that hive of scum and villainy)