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Supreme Court: First Sale Doctrine applies to foreign manufactured works

March 20, 2013 0 Comments

Intellectual PropertyAhem, please pay attention because this is a BIG deal! The United States Supreme Court ruled yesterday that the First Sale Doctrine applies to copyrighted works manufactured and sold overseas. Kirtsaeng v. John Wiley & Sons, 11-697 (Mar. 19, 2013).

Brief refresher:

The First Sale Doctrine is a copyright law doctrine which allows purchasers of copyrighted works to resell those works at their pleasure without owing anything to the original work creator. Meaning, the creator was properly compensated for his work (e.g., a textbook) when that work was initially purchased; subsequently the original purchaser can sell to whomever he or she wants at whatever price she wants and does not owe the creator any additional royalty on the resale.

Background on Kirtsaeng:

Textbook publisher John Wiley & Sons sued Kirtsaeng for buying their textbooks abroad, where the books are sold by the publisher at cheaper prices, and the reselling those books for profit here in the United States. It was the plaintiff’s position that the First Sale Doctrine did not apply to works purchased abroad and resold in the US (this position was quasi-supported by the Supreme Court’s failure in the Costco v. Omega case to reach a decision on precisely this issue — the court was deadlocked at 4-4 with Justice Kagan recused). Now the Supreme Court has reached a final decision on the issue.

What this means:

This is a big win for consumers who will no longer be subject to publishers’ pricing control mechanisms (e.g., they sell cheap abroad but milk US consumers for every penny). Forbes notes that this is also “a win for museums, libraries and other institutional collectors of copyrighted works, who face less risk now when acquiring copyrighted works” abroad.

As Forbes also noted, however, the First Sale doctrine is likely to be short-lived to the extent that (1) publishers will alter their products so that foreign and local versions will not be as easily interchangeable, and (2) there is no digital First Sale doctrine (digital works are licensed rather than purchased by consumers) so, in the end, an increase in digital publishing will make this major consumer victory short-lived.

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