Supreme Court Says First Sale Doctrine Not Geographically Limited

Decision limits copyright owners' ability to control geographic distribution

By John Eggerton -- Broadcasting & Cable, 3/19/2013 12:32:55 PM

The Supreme Court has ruled that the "first sale" doctrine covers a copyrighted work legally made abroad and imported into the United States without the copyright owner's permission, overturning a Second Circuit decision that it did not.

The case was Kirtsaeng v. John Wiley & Sons. Supap Kirtsaeng is a Thai-born U.S. student who imported and resold in the U.S. cheaper copies of Wiley textbooks manufactured for sale abroad.

The Motion Picture Association of America had backed the Second Circuit, filing an amicus brief in support of book publisher John Wiley & Sons. MPAA argued that the doctrine does not apply to copies manufactured abroad for sale in a foreign market.

MPAA, which is vigilant in protecting copyright protections of content, argued that extending the first sale doctrine to importation of copies manufactured and intended for sale in foreign markets could undermine the ability to control entry into markets, limit the ability to adapt to changing market conditions, undermine territorial licensing agreements and "prevent U.S. copyright holders from obtaining the economic reward Congress intended to provide under U.S. law to motivate investment in creative activity."

But in a 6-3 decision, the Supreme Court concluded that there is no geographical limitation on the first-sale doctrine that would limit its application to copies made abroad with the copyright holder's permission.

Public Knowledge, which had filed a brief in support of Kirtsaeng (the court cited the brief in its opinion), was understandably pleased with the outcome.

"We are glad that the Supreme Court recognized and prevented the harm that could have been done by the decision of the lower court," the group said in a statement. "The fact that these arguments made it to the Supreme Court is unsettling. We were almost in a situation where anyone that held a garage sale or loaned a book to a friend could be in violation of copyright law. We believe that this is evidence that a larger conversation about copyright reform is in order, to restore the balance of the law between the interests of authors, copyright holders, and the public."

"We believe [Tuesday]'s Supreme Court decision will hinder American businesses' ability to compete overseas to the detriment of the long-term economic interests of the United States, " said MPAA in a statement, "and particularly its creative industries. We plan to study the decision further before determining the most appropriate action for us to take."