Are Your Ownership Rights in Peril? A Commentary on Kirtsaeng v. John Wiley & Sons

First, I am afraid you will need to know some bare basics about copyright law before understanding what this incredibly interesting post is about (it should be quick and painless, I promise).  First, know that a “copyright” is a legal right of control given to a specific person to control something (often the control is given to the creator of the thing which is copyrighted).  One of the simplist ways to understand this legal concept is to think of a textbook: the creator of the textbook usually has the exclusive legal right to print that material.  However, in copyright law, there is also a legal doctine called the “first-sale doctrine,” which basically states that the possessor of a copyright only has the legal right of control over the first sale of the copyrighted thing (and so you would be able to resell the textbook once you had legally purchased it).

Well, earlier this week the Supreme Court of the United States heard oral arguments in the case of Kirtsaeng v. John Wiley & Sons.  The issue in this case is whether a person can resell their possessions under certain situations when that possession is subject to some third person’s United States copyright protection.

In Kirtsaeng v. John Wiley & Sons, the case (in a nutshell) is about a college student from a foreign land who discovered (as so many of us have) the extremely high prices of college textbooks.  He then discovered that he could buy those same textbooks in his native land (for much cheaper than they cost here), ship them here cheaply, and resell them for a massive profit.

The problem?  The textbook company (who owned the copyright) was not happy.  In their eyes, this student was essentially stealing their profits, “undercutting the publisher’s prices” as put by Tim Devaney of The Washington Times.  (To read Tim Devaney’s article on this case, click here).

As many cases that come before the Supreme Court, this case has already been heard and ruled upon by the U.S. Court of Appeals (to read a copy of the Court of Appeals Opinion, click here – note, the Court of Appeals Opinion actually lays forth a good explanation of the legal principles involved in this case, much more in depth than the simplistic explanation I have provided here).  In their Opinion, the Court of Appeals narrowly defined the issue being decided here:

The principal question presented in this appeal is whether the first sale doctrine, 17 U.S.C. § 109(a), applies to copies of copyrighted works produced outside of the United States but imported and resold in the United States. Under another basic copyright statute, it is ordinarily the case that “[i]mportation into the United States, without the authority of the owner of copyright under [the Copyright Act], of copies… of a work that have been acquired outside the United States is an infringement of the [owner’s] exclusive right to distribute copies….”

John Wiley & Sons, Inc. v. Kirtsaeng, 654 F.3d 210, 212 (2d Cir. 2011).  The Court of Appeals went on to hold in favor of John Wiley & Sons (the possessor of the copyright), and the Court held that “the first sale doctrine does not apply to copies manufactured outside of the United States.” Id., 654 F.3d at 224.

So it is expected that soon the Supreme Court will review the Court of Appeal’s decision and rule in the Kirtsaeng case by weighing the rights of the copyright holder (the textbook company in this case) against the application of the first-sale doctrine (the student who resold the books) to determine where the legal line should be drawn.

Historically, the Supreme Court has been closely divided on cases such as this.  See, for example, the case of Omega v. Costco decided in 2010 (here is a copy of the Court of Appeal’s decision, which the Supreme Court then heard and was divided 4-4 on), where this issue was addressed: the Omega watch was bought in a foreign country, shipped here, sold wholesale for a major profit, and the owner of a copyright affected by the watches resell filed suit.  In Omega v. Costco, Supreme Court Justice Kagan had to recuse herself (aka, abstain from voting) because she had taken part in the case as an attorney (the Solicitor General) for the United States.  However, many commentators are expecting Justice Kagan to break the 4-4 tie that resulted in the Omega case and help provide the country with a new legal rule in this area of law.

And so we arrive at a truly interesting thing: here we are seeing competing interests being weighed by the highest Court of this land to potentially arrive at a new legal rule or guideline in this area of law.  This is how legal standards are created, and we will certainly want to watch and see what the Supreme Court does!

So, what might be affected by the Supreme Court’s ruling in this case?  According to the U.S. Copyright Office, a copyright can protect “original works of
authorship including literary, dramatic, musical, and artistic works, such as
poetry, novels, movies, songs, computer software, and architecture.”  Long story short, the ruling in this case might affect your ability to resell any copyrighted thing from a book to a movie, from a computer to  a car.

ADDENDUM – As reported by this news article, dated March 19, 2013, the “Supreme Court upholds First Sale Doctrine in textbook resale case.”  http://arstechnica.com/tech-policy/2013/03/thai-student-protected-by-first-sale-supreme-court-rules/

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The author of TNLawyerLee is Nicholas W. Lee, Esq., an attorney in Knoxville, Tennessee.  If you or someone you know need an attorney, please click here for Mr. Lee’s contact information and contact him today for a free consultation.  Also, please feel free to visit Mr. Lee’s website, www.TNLawyerLee.com or follow his page on Facebook for updates as to his law practice or new posts to TNLawyerLee by clicking here.

The information on this site is general information and should not be construed as legal advice. Every case is unique and you should consult with an attorney in your state about the specific details of your case. Nothing on this site or in correspondence with Nicholas Lee or his agents shall be construed as forming an attorney-client relationship and information you send prior to the forming of an attorney-client relationship may not be kept confidential. Neither this site nor correspondence with Nicholas Lee or his agents shall be construed as a promise nor as undertaking a duty regarding you or your case. Nicholas Lee and his agents are not retained as your legal counsel unless a valid written Representation Agreement is reached regarding your specific case.

Copyright © 2012. Nicholas W. Lee, Attorney at Law. All rights reserved. This site’s content may not be used without the prior written consent of Nicholas Lee.

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