[JURIST] The US Supreme Court [official website] ruled 6-3 Tuesday in Kirtsaeng v. John Wiley & Sons, Inc. [opinion, PDF; JURIST report] that the “first sale” doctrine [17 USC § 109(a)] applies to imported works. When Supap Kirtsaeng came to study at Cornell University, he realized that the same textbooks his peers used were sold at drastically lower prices in his home country of Thailand. He had his family buy the books for him, and he resold them to classmates, accruing approximately $100,000 in profit. Justice Stephen Breyer, writing for the court, explained that reselling copyrighted works purchased in a different nations does not violate the importation [17 USC § 602(a)(1)] facet of copyright law, as it is permitted by the first sale doctrine:

Kirtsaeng, however, reads the words “lawfully made under this title” as imposing a non-geographical limitation. He says that they mean made “in accordance with” or “in compliance with” the Copyright Act. In that case, §109(a)’s “first sale” doctrine would apply to copyrighted works as long as their manufacture met the requirements of American copyright law. In particular, the doctrine would apply where, as here, copies are manufactured abroad with the permission of the copyright owner.

In our view, §109(a)’s language, its context, and the common-law history of the “first sale” doctrine, taken together, favor a non-geographical interpretation. We also doubt that 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. We consequently conclude that Kirtsaeng’s nongeographical reading is the better reading of the Act.

The court heard a similar case in Costco Wholesale Corp v. Omega, SA [JURIST report] last year but split 4-4 on whether the first sale doctrine applied. JURIST Guest Columnists Beth Heifetz and David Cooper advocated [JURIST comment] for a middle ground approach: “If there is copyright protection against resale only for copyrighted goods both manufactured and first sold outside the US, then copyright holders are given the reasonable option to price goods differently abroad, but not the unreasonable option to punish those who are reselling goods that they legally bought in the US in the first place.”

Justice Elena Kagan and Justice Samuel Alito concurred separately in the opinion to note that the decision will substantially narrow copyright law’s ban on unauthorized importation. Justice Ruth Bader Ginsburg, joined by Justice Anthony Kennedy and in part by Justice Antonin Scalia, dissented from the opinion. “To justify a holding that shrinks to insignificance copyright protection against the unauthorized importation of foreign-made copies, the Court identifies several ‘practical problems.’ The Court’s parade of horribles, however, is largely imaginary. Congress’ objective in enacting 17 U SC § 602(a)(1)’s importation prohibition can be honored without generating the absurd consequences hypothesized in the Court’s opinion. … Because economic conditions and demand for particular goods vary across the globe, copyright owners have a financial incentive to charge different prices for copies of their works in different geographic regions. Their ability to engage in such price discrimination, however, is under-mined if arbitrageurs are permitted to import copies from low-price regions and sell them in high-price regions.”