With the U.S. Supreme Court’s 2012-2013 term beginning Monday, the justices not only will tackle plenty of headline-grabbing issues — including academic affirmative action and gay rights — they also will help determine the global reach of U.S. copyright law, answering the question of whether an overseas purchaser of a copyrighted work may resell it in the United States without the copyright holder’s permission. The case that is supposed to offer high court review of these matters some time this term is Kirtsaeng v. John Wiley & Sons Inc. involving the first-sale doctrine that entitles the purchaser of a copyrighted work to transfer that particular work without the copyright holder’s permission. Hence, used bookstores, CD stores, libraries, eBay and video rental stores flourish. It is unclear, though, how the first-sale doctrine applies to foreign-purchased works, as occurred when a student from Thailand had friends send him foreign editions of textbooks, which he then resold on eBay to students in the United States. The dispute has worked its way through federal courts in New York, with the U.S. Court of Appeals for the Second Circuit upholding a lower court’s $600,000 award for copyright infringement, granted to John Wiley & Sons, the publisher, on the basis that the first-sale doctrine did not apply. The appellate decision (read here) has raised new concerns in the art community, particularly in New York, and in Hollywood.The issue of overseas application of the first-sale doctrine is in flux. In 2010, the Supreme Court upheld a Ninth Circuit appellate decision that the first-sale doctrine did not apply to overseas purchases of copyrighted works imported for resale in the United States. See Costco v. Omega. Tis was a 4-4 ruling; it affirmed the lower court ruling only and its application to cases beyond the Ninth Circuit is in question. A Costco spokesperson said the decision “effectively urges U.S.-based manufacturers to flee the United States to acquire complete control over distribution of their good in the American market.”
The High Court had not dealt with the question as to whether the first-sale doctrine applies to books manufactured abroad.
The National Law Journal reports that the Association of Art Museum Directors and 28 museums of art filed an amicus brief with the Supreme Court, arguing in detail that there were unintended consequences of its upholding the lower court’s ruling. “Under the Second Circuit’s reasoning, merely hanging a foreign-made painting on the walls of a museum, buying and importing a sculpture that was created outside the country, or loaning either to another institution for exhibition to the public, could give rise to claims of copyright infringement,” warned Stefan Mentzer, counsel of record on the brief.
The RIAA and MPAA also have filed an amicus brief: “Copyright protection is essential to the health of the motion picture and music industries and the U.S. economy as a whole. Like the sale of ‘pirated’ copies, unauthorized importation of copies of protected works made overseas and intended only for sale in a foreign market can undercut or eliminate the economic benefit that Congress intended to provide under the Copyright Act. … Extending the first- sale doctrine to copies made abroad for distribution in a foreign market could impede authors’ ability to control entry into distinct markets, limit their flexibility to adapt to market conditions, or undermine territorial licensing agreements. If accepted, Kirtsaeng’s view of the first sale doctrine could thus prevent U.S. copyright holders from obtaining the economic reward Congress intended to provide under U.S. law to motivate investment in creative activity.”
The High Court hasn’t announced its full docket for the term and analysts say that it may not be until January or even at term’s end in June before it will be possible to see the full schedule and implication of the cases the justices take up.