U.S. Copyrighted Works May Be Resold Anywhere After “First Sale” Outside the U.S.

The World in U.S. Courts: Spring 2013 - Intellectual Property (Copyright) | March.19.2013

Kirtsaeng v. John Wiley & Sons, Inc. (U.S. Supreme Court, Mar. 19, 2013)

The U.S. Supreme Court holds that the “first sale” doctrine under U.S. copyright law, whereby a copyright is “exhausted” upon the sale of a lawfully-acquired copy, applies where the sale occurs outside the U.S.

Facts

A U.S. publisher sold English-language versions of textbooks outside the U.S. at prices below that which it sold the same texts in the U.S. A citizen of Thailand resident in the U.S. to attend college purchased these lower-priced textbooks and resold them in the U.S. to help fund his education. The publisher sued him for copyright infringement, arguing that the lawful purchase of the textbooks outside the U.S. did not eliminate the publisher’s right to prevent the resale of the textbooks in the U.S. The U.S. Supreme Court disagreed, finding that the lawful purchase of the copyrighted works outside the U.S. satisfied the statutory test that permitted the resale as an exception to the copyright holder’s rights.

Analysis

U.S. copyright law creates rights as a part of interconnected statutory provisions. The basic copyright, embodied in Section 106 of the Copyright Act, gives a copyright holder the exclusive right to sell or resell copyrighted works. Section 109(a), however, creates an exception where a work has been lawfully sold. This “first sale” doctrine is said to “exhaust” the copyright holder’s rights. It was unsettled whether a first sale outside the U.S. would be deemed to satisfy the statutory requirement. The Supreme Court held that it did. The effect of the ruling is to permit the resale of copyrighted works in the U.S. that were lawfully acquired outside the country.

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