Tag Archives: first-sale doctrine

Supreme Court Saves Used Comics Business

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Supreme CourtThe Supreme Court in a 6-3 ruling, held that the doctrine of first sale, which allows for legally acquired copyrighted works to be resold by their owners, does apply to works made overseas. This is a huge deal. In Kirtsaeng vs. Wiley a Thai national (Kirtsaeng) came to the U.S. to study at Cornell and U.S.C. To help pay for his expenses, he resold textbooks his family purchased at bookstores in Thailand. We’re talking several hundred thousand dollars worth of textbooks. The profit was in the range of $100,000. This caught the attention of Wiley (a textbook publisher) who sued for copyright infringement. The district court found for Wiley and imposed statutory damages of $600,000.   The Second Circuit affirmed.

This decision reverses the Second Circuit court decision which ruled that “lawfully made” limited the first sale doctrine to those items made in the areas that the U.S. Copyright Act is law. So that means you couldn’t resell items made in China for instance.

This had a potentially huge impact on the geek community as video games, comics, movies, etc. are rarely made here in the United States. If the Supreme Court upheld the original decision, it would have decimated the second-hand market.

The Supreme Court decided though there is no “geographical limitation” on the copyright law.

The fact that the Act does not instantly pro­tect an American copyright holder from unauthorized piracy taking place abroad does not mean the Act is inapplicable to copies made abroad.

Numerous organizations, associations and more were also acknowledged for their comments on the case in that this would have curtailed the “progress of science and useful arts.”

Supreme Court Weighs First-Sale Case and Why It Matters to You

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This Monday, not deterred by Sandy bearing down on DC, the Supreme Court heard oral arguments in  Kirtsaeng v. John Wiley & Sons, Inc.  a court case involving the first-sale doctrine. At issue as provided by Scotus Blog:

How do Section 602(a)(1) of the Copyright Act, which prohibits the importation of a work without the authority of the copyright’s owner, and Section 109(a) of the Copyright Act, which allows the owner of a copy “lawfully made under this title” to sell or otherwise dispose of the copy without the copyright owner’s permission, apply to a copy that was made and legally acquired abroad and then imported into the United States?

The case comes after a lower court ruling. Supap Kirtsaeng, a graduate student, arranged to import textbooks legally purchased at a discount in his native Thailand. He then resold them to buyers in the United States on eBay to help pay for his school expenses. The publisher, John Wiley & Sons, sued, arguing that the first-sale doctrine does not apply to works purchased overseas in so-called gray markets. The lower court sided with Wiley & Sons.

So lets start with what the first-sale doctrine is. This is the concept that if you want to resell or donate a legally purchased copywritten item, you don’t need to seek the permission of the rights holder. This means you can resell your video games or cd’s or comic books that you legally purchase. The lower court said “the question presented is how these provisions apply to a copy that was made and legally acquired abroad and then imported into the United States.” I want you to take a moment to go and look at where those video games, cd’s and comic books you play, listen to and read are made. Bet you it isn’t the United States.

The Supreme Court last considered the right to import copyrighted works from overseas for domestic resale in 2010, when it deadlocked four to four in Costco v. Omega, with Justice Elena Kagan, who had been involved in the case as an attorney with the Justice Department, having recused herself. Kagan is participating in the Kirtsaeng case.

As you can see in the posted oral arguments, the court seemed to take issues with both sides’ arguments. But, this ruling has major implications for us comic book fans. A strict interpretation that says we can’t sell foreign imported works means we couldn’t resell our old comics. Those who like to buy and sell on ebay or shop owners with old stock could be hampered by this, shutting down the secondary market.

There’s also the other extreme. If the court rules that legally purchased items could be resold, there’s greater implications for digital goods. If you purchase a digital comic, no matter the service, could you now resell those no matter the agreement you sign to use the digital service? In a statement, Andrew Shore, executive director of the Owners’ Rights Initiative, said the group “hopes that the Supreme Court will take this opportunity to defend owners’ rights and clarify that if you buy something, you own it.” Take that and apply it to virtual goods and you can see this decision has a much greater impact than some imported college textbooks.

With a ruling expected in 2013, you better believe all eyes should be on the Supreme Court.