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The limits of copyright law

The Supreme Court has forcefully declared that copyright law does not extend to prohibiting the resale of books bought overseas.

March 20, 2013
  • In a forceful declaration of the limits of copyright law, the Supreme Court ruled Tuesday that manufacturers of copyrighted works couldn't bar people from importing and reselling licensed copies that were made overseas. Above: Justice Stephen Breyer.
In a forceful declaration of the limits of copyright law, the Supreme Court… (Win McNamee / Getty Images )

Supap Kirtsaeng was a Thai student in the United States who helped finance his education (and then some) by reselling textbooks that family members bought for a low price in Thailand. Textbook publisher John Wiley & Sons sued Kirtsaeng for copyright infringement in 2008, citing a federal ban on importing copyrighted goods without the copyright holder's permission. Lower courts agreed with Wiley, opining that the "first sale" doctrine — a buyer's right to sell, lend, rent or give away a lawfully purchased copy of a copyrighted work — did not apply to foreign-made products even if they'd been manufactured under contract with the copyright holder.

On Tuesday, the Supreme Court overturned those decisions in a forceful declaration of the limits of copyright law. The justices ruled, 6 to 3, that the first-sale doctrine applies no matter where a copy is made, as long as it's done in accordance with U.S. law. The decision in Kirtsaeng vs. John Wiley & Sons provides a welcome clarification that Americans are free to redistribute the copies they own that were legally made and sold overseas, just as they are with the copies they buy in the United States.

Writing for the majority, Justice Stephen Breyer noted that the lower courts' interpretation would cause nightmares for libraries and museums, whose ability to collect, lend and display works would be threatened if there were no first-sale rights to books and artwork made overseas. EBay, Goodwill Industries and other markets for used goods would be exposed to huge liabilities, as would sellers of new software-powered products that were assembled overseas — a category that's expanding rapidly, thanks to globalization and the ubiquitous use of computer chips. Limiting first-sale rights to products made domestically also would give publishers such as Wiley an incentive to print overseas, because doing so would allow them to prohibit used copies of those books from being traded by students in the United States.

Lawyers for the entertainment industry, software makers and other copyright holders argued that extending first-sale rights to copies made outside the border would make it all but impossible for them to set higher or lower prices in countries depending on the local economy. Breyer conceded that it would be more difficult to segment markets geographically, but added that "we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights."

That's a key point. Courts shouldn't assume that copyright law was designed to protect copyright holders' slowly evolving business models. If Congress wants to outlaw the kind of "gray market" importing that Kirtsaeng practiced, it can do so explicitly. But there are many other industries that have found ways to deter those practices without the aid of copyright law — for example, by using contracts to keep tight control over foreign retailers. Courts have to balance copyright holders' interests against the public's ability to access those works and exercise the rights of ownership. In the Kirtsaeng ruling, the justices restored that balance.

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