Supreme Court Hears Oral Arguments In Gray-Market Copyright Case

Undaunted by an approaching hurricane that had already shut down the federal government, public transportation and nearly all of the rest of Washington, D.C., the U.S. Supreme Court on October 29, 2012, heard oral arguments in a copyright case involving the unauthorized resale in the United States of foreign versions of textbooks originating from U.S. publishers. While significant portions of the East Coast were shut down, the Supreme Court peppered counsel for both parties and the government with a constant stream of difficult questions that did not indicate how the Court will rule. Kirtsaeng dba Bluechristine99 v. John Wiley & Sons Inc., Case No. 11-697 (U.S. Supr. Ct.) (oral arguments held 10/29/12).

U.S. textbook publisher John Wiley & Sons brought a copyright infringement suit against Supap Kirtsaeng, a University of California graduate student from Thailand. Kirtsaeng's family and friends shipped him foreign editions of textbooks printed abroad by Wiley Asia, which Kirtsaeng then sold in the U.S. on commercial websites such as eBay for substantial profit. Kirtsaeng offered the defense of the first sale doctrine, but the district court prohibited him from raising the defense and rejected its applicability to foreign editions of textbooks. Accordingly, a jury found Kirtsaeng liable for willful copyright infringement and awarded Wiley damages of more than half a million dollars. Kirtsaeng appealed to the U.S. Court of Appeals for the Second Circuit, which affirmed the trial court. In April 2012 the U.S. Supreme Court agreed to hear the case. (See IP Update, Vol. 15, No. 5).

In copyright law, the first sale doctrine permits the owner of a lawfully made copy of a copyrighted work to resell or otherwise dispose of that copy without limitations imposed by the copyright owner. The doctrine is also referred to as exhaustion, providing that once a lawfully made copy of a copyrighted work is distributed by the copyright owner, the owner's exclusive right of distribution with respect to that copy is exhausted, and the owner of the copy may dispose of it as it sees fit. Kirtsaeng gives the Supreme Court a second chance to answer the question of whether the first sale doctrine provides a defense if a foreign-made work is imported and resold in the United States without the copyright owner's permission, a question that, when Justice Kagan's recused herself in that case, resulted in a 4-4 deadlock in the Court's 2010 Costco Wholesale Corp. v. Omega...

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