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Recordings of the oral arguments should be posted later in the week. In the meantime, if you’re looking for some background on the case, see Jodie's post here, or read on below. If you're looking for information on the friend of the court brief Public Knowledge filed in this case, see here.
This case involved a publisher suing a student who was importing international editions of textbooks and selling them in the US. Since the international editions (containing pretty much he exact same material) were cheaper overseas, he could sell them at a lower price than the US editions. Reselling books typically won't run afoul of copyright law because of the first sale doctrine in section 109. However, Wiley, the publisher, chose a very particular interpretation of section 109.
Section 109 says:
…the owner of a particular copy…lawfully made under this title…is entitled, without the authorization of the copyright owner, to sell or otherwise dispose of the possession of that copy…
The argument centers around what "lawfully made under this title" means. As a literal matter "this title" is title 17, the part of the US Code that deals with copyright law. No one is disputing that the textbooks that Kirtsaeng is selling were legally made. But Wiley argues that they couldn't have been "lawfully made under title 17" because they were made outside the United States. Since, it argues, title 17 doesn’t apply outside of the US, nothing made outside of the US is ever "lawfully made under this title," and first sale therefore doesn't apply to it.
This doesn't just mean that Kirtsaeng's importation and sale of those books would be illegal. It would also mean that any copy of a copyrighted work made outside of the country is tainted—you would actually be violating copyright law if you tried to sell, lend, or even give away that book you bought at the airport in Canada, or that rare import CD you ordered online. The software in your phone, tablet, and even your car? If it was made in another country, you would be on the hook for copyright infringement if you tried to sell it without the manufacturer's permission. In a way, any foreign-made product that contains a copyrighted work becomes cursed, unable to be distributed without infringement. This might seem ridiculous, but it's exactly what an appellate court in New York decided. And now the Supreme Court will take up the case.
There's a few different ways that this can go. First, the Supreme Court could uphold the appellate court's decision, rendering nearly everyone in the country a copyright infringer, and begging for legislative action. Another possibility is that the Supreme Court will find that "lawfully made under this title" means more like "made without infringing US copyright laws." This is the interpretation we've favored. That would keep all of our secondhand sales legal, and it would also have the effect of making all imports of copyrighted works legal as well.
But there are also a couple of other intermediate positions, stemming from the fact that another section of title 17, section 602, complicates matters somewhat. Section 602 says that importing copies of works without the permission of the copyright holder is a violation of the distribution right. Now, since the distribution right is subject to first sale, first sale should still apply to importations. But what is the point of this section, many argue, if legal copies can be imported anyway? The Ninth Circuit has tried to split the difference by creating a new rule that would allow imports to be considered infringing while preventing all foreign-manufactured, copyrighted goods from bearing a legal curse. The Ninth Circuit tries to do this by saying that first sale will apply to foreign-made copies if there has been an initial authorized sale of the copy—in other words, once the copyright holder has sold the copy once, it's free to be imported as well.
The problem with this argument is, simply, that it doesn't square with the language of the law. Title 17 doesn't say, anywhere, that an authorized sale activates the first sale doctrine—the first sale doctrine gets activated when the thing is made. As much as this interpretation might make intuitive sense, it's just not what the law says. It's tempting to think that an initial sale of a thing activates first sale—it's there in the name of the doctrine, after all—but it's the letter of the law, not the connotations of its terms, that matter.
Another argument that tries to make imports illegal while preventing everyone and their mother from being infringers plays with the definition of "made." This theory says that "lawfully made under this title" doesn't actually mean "manufactured according to/under these laws," but "come into legal existence under these laws." The idea is that a copy of a work can be "made" either by being manufactured in the US, or "made" when it's imported. This way, a legal import "makes" the copy under the law, so the curse is lifted from it. This is clever, but perhaps too clever. After all, if Congress had wanted to say that importation activated first sale, it could have said just that. Furthermore, this makes the definition of "lawfully made" circular. If a lawful importation is "making" something under section 109, what's a lawful importation? Looking to section 602 tells us to see what a lawful distribution is, and doing that requires looking up…section 109.
We think it makes a lot more sense to say that "lawfully made under this title" means "made legally, according to our copyright laws." Section 602 can just as easily be read as making imports by non-owners illegal, as well as preventing the importation of illicit, illegally-produced copies.
In the meantime, the decision of the New York appellate court threatens your ability to control the things you own. And if the Supreme Court upholds that decision, we'll need to fight in Congress to fix it, and we'll need your help to do it.