Resale of Copyrighted Works From Foreign Sellers Is Permissible
On March 19, 2013, the U.S. Supreme Court, in Kirtsaeng v. John Wiley & Sons, ruled that the "first sale doctrine" in copyright law allows the reselling of copyrighted works lawfully manufactured abroad and imported into the United States. To read the full decision click here.
The “first sale” doctrine [17 U.S.C. § 109(a)] provides 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 or phonorecord.” The issue resolved by the Court is whether “lawfully made under this title” pertains only to works made in the United States.
In a 6-to-3 decision, the Court agreed that Supap Kirtsaeng, a student at Cornell University, was entitled to sell textbooks that had been sent to him from friends and relatives who legally purchased the books in Thailand. The Court explained that the language of § 109(a) does not support a geographical limitation to the “first sale” doctrine and the phrase “lawfully made under this title,” does not mean lawfully made in the United States, but rather “in accordance with” or “in compliance with” the Copyright Act, regardless of where the copy was made.
The impact of this decision is not limited to printed publications and it will likely benefit businesses that distribute other products in the United States containing components that were lawfully made abroad including “automobiles, microwaves, calculators, mobile phones, tablets, and personal computers that contain copyrightable software programs or packaging.” According to the Court, a geographical limitation to the “first sale” doctrine “would prevent the resale of, say, a car, without the permission of the holder of each copyright on each piece of copyrighted automobile software.” The Court also noted that “over $2.3 trillion worth of foreign goods were imported in 2011,” many of which “bear, carry, or contain copyrighted” materials.
This ruling will also benefit U.S. customers who will be able to purchase cheaper copyrighted works from foreign sources. On the other hand, the creators of the works that may have been sold overseas at a lower price than in the U.S. will have to either lower the price in the U.S. or raise the price in foreign countries which, in turn, could result in fewer sales. The ruling may also impact a company’s decision to distribute content electronically under a license, rather than in print.