Intellectual Property Law – Copyright Law – Applicability of “First Sale” Doctrine to Copies of Copyrighted Works Lawfully Produced Abroad

by Mitchell Ashkenaz

In 2008, John Wiley & Sons, Inc. (the “Plaintiff”) filed suit against Supap Kirtsaeng (the “Defendant”) for copyright infringement.

The Plaintiff is an American publishing company specializing in academic material and, for all intents and purposes, should be considered the per se American copyright owner of the material it publishes. To facilitate sales in foreign markets, the Plaintiff often assigns to its wholly owned foreign subsidiaries the rights to publish, print, and sell its copyrighted material abroad. Although the contents of the domestic and foreign made goods are generally similar, those goods intended for foreign markets are often of a different physical quality, which allows the Plaintiff to sell them abroad at a lower price than similar goods produced for domestic markets. Copies of the Plaintiff’s products produced abroad and intended for foreign markets usually contain language indicating that the copy should only be sold in a particular country or geographical region.

The Defendant, a Thai citizen, moved to the United States in 1997 to study mathematics. Between 2007 and 2008, the Defendant imported copies of the Plaintiff’s foreign edition textbooks from Thailand, which he then sold in the United States for profit.

At trial, the Plaintiff claimed that the Defendant’s importation and resale of its foreign edition textbooks infringed on its exclusive right to distribute under 17 U.S.C. § 106(3) and was thus in violation of 17 U.S.C. § 602’s prohibition against unauthorized importation. In response, the Defendant asserted that his conduct was protected by the “first sale” doctrine under 17 U.S.C. § 109(a). The district court found for the Plaintiff, rejecting the Defendant’s “first sale” defense, and held that the “first sale” doctrine did not apply to goods manufactured abroad. The jury then found the Defendant liable for willful infringement and assessed statutory damages of $600,000. On appeal, a divided panel for the Second Circuit affirmed. On certiorari to the Supreme Court of the United States, held, reversed. The “first sale” doctrine applies to copies of copyrighted material lawfully made abroad. Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013).

 

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