Supreme Court Will Hear Case on Importation and the First Sale Doctrine

April 16, 2012

This morning the Supreme Court announced that it will hear arguments in a case with far-reaching implications for anyone who has ever sold or given away goods that contained copies of copyrighted works. Public Knowledge, along with the Electronic Frontier Foundation and U.S. PIRG, filed an amicus brief in January urging the Court to hear this case. The Court should ultimately reverse the lower court’s ruling, which effectively granted copyright holders a perpetual distribution right for any copies manufactured outside of the United States.

This case, which centered around a graduate student who bought books in Thailand and resold them in the United States to pay for his education, has far-reaching implications for all kinds of goods that we buy and sell every day. Under the lower court’s ruling, the first sale doctrine, which protects buyers’ rights to resell, give, or otherwise dispose of their personal property, does not apply to goods that contain a copy of a copyrighted work. This ruling could cripple markets for used books, movies, CDs, toys, and any other goods that contain copyrighted works. For example, many cars contain copyrighted computer programs, so used car sales for foreign-manufactured would become illegal (without the copyright owner’s permission).

On a broader level, this case fits into the continued battle that publishers and certain other distributors wage against secondary markets. As PK has previously explained, these publishers and other distribution intermediaries need to let go and accept that secondary markets are not illegitimate threats. In today’s increasingly global economy, it’s simply more and more unreasonable to expect that a publisher can price-discriminate based on where a particular buyer lives, and the law should certainly not be interpreted to wrongly prop up that business model.

As always, Public Knowledge will keep you updated as the parties file briefs and argue before the Supreme Court in the upcoming months. We’re glad the Supreme Court has recognized the importance of the issues raised by this case, and will continue advocating for an interpretation of the first sale doctrine and importation right that protects consumers’ fundamental rights to control their own personal property.