April 16, 2012
Today the Supreme Court granted certiorari in one case of interest to the business community:
Copyright Act—First Sale Doctrine’s Application to Goods Produced Abroad
Under the Copyright Act’s first sale doctrine, codified at 17 U.S.C. § 109(a), “the owner of a particular copy . . . lawfully made under this title” may sell or otherwise transfer ownership of that copy without the authorization of the copyright owner. In Quality King Distributors, Inc. v. L’anza Research International, Inc., 523 U.S. 135 (1998), the Supreme Court held that the first sale doctrine is applicable to imported copies. In Costco Wholesale Corp. v. Omega, S.A., 131 S. Ct. 565 (2010), the Court granted certiorari to decide whether the first sale doctrine applies to imported goods that are manufactured abroad, but the lower court’s decision in that case was affirmed in a one-line order by an equally divided Court (with Justice Kagan recused). Today, the Supreme Court granted certiorari in Kirtsaeng v. Wiley & Sons, Inc., No. 11-697, to decide the same question on which it was equally divided in Costco: whether the first sale doctrine applies to goods produced abroad and then imported into the United States.
Petitioner Supap Kirtsaeng arranged for family and friends in Thailand to purchase and send him foreign edition textbooks originally printed by the Asian subsidiary of respondent Wiley & Sons, Inc. to resell in the United States. Upon learning that the petitioner had resold these textbooks on commercial websites like eBay.com, respondent sued petitioner for copyright infringement in the Southern District of New York. Before trial, the district court rejected petitioner’s first sale defense as a matter of law. The jury ultimately returned a verdict for respondent.
A divided panel of the Second Circuit affirmed, holding that “the phrase ‘lawfully made under this title’ in § 109(a) refers specifically and exclusively to copies that are made in territories in which the Copyright Act is law, and not to foreign-manufactured works.” 654 F.3d 210, 222. Finding the statutory text “utterly ambiguous,” the Second Circuit adopted an interpretation of § 109(a) that it believed “best comports with both § 602(a)(1) [of the Copyright Act]”—which prohibits importing copyrighted works acquired abroad without the authorization of the copyright holder—“and the Supreme Court’s opinion in Quality King.” Id. at 221.
This case is important to importers, distributors, and retailers of copyrighted goods produced overseas. Offshore product manufacturing is increasingly common, and businesses need to know whether goods lawfully produced and sold abroad are subject to a copyright infringement action if imported into the United States without the authorization of the copyright owner.
Absent extensions, which are likely, amicus briefs in support of the petitioner will be due on June 7, 2012, and amicus briefs in support of the respondent will be due on July 9, 2012. Any questions about the case should be directed to Dan Himmelfarb (+1 202 263 3035) in our Washington, DC office.
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Mayer Brown's Supreme Court & Appellate practice distributes a Docket Report whenever the Supreme Court grants certiorari in a case of interest to the business community and distributes a Docket Report-Decision Alert whenever the Court decides such a case. We hope you find the Docket Reports and Decision Alerts useful, and welcome feedback on them (which should be addressed to Andrew Tauber, their general editor, at email@example.com or +1 202 263 3324).
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