Supreme Court: Copyrighted goods can be resold in the US

The Supreme Court on Tuesday ruled that copyrighted goods made abroad can lawfully be resold in the United States without obtaining permission from the copyright holder first.

The court issued its opinion in a 6-3 decision, rejecting a copyright infringement suit that book publisher John Wiley & Sons brought against a Thai college student studying in the United States.

Justice Stephen Breyer authored the majority opinion, which reversed an earlier appeals court ruling.

"We hold that the 'first sale' doctrine applies to copies of a copyrighted work lawfully made abroad," Breyer writes.

Wiley sued Thai student Supap Kirtsaeng for copyright infringement after he launched a small business re-selling U.S. copyrighted textbooks made abroad on eBay's online auction website. The textbooks were similar to the versions made in the U.S., but sold for slightly cheaper.

Kirstaeng would ask his family to purchase the cheaper English-language copies of textbooks, including copyrighted books by Wiley, in Thailand and he would then re-sell them on eBay.

Copyright reform advocates and Web companies that run online marketplaces, such as eBay and Google, had sounded alarm about the case. Library associations also raised concerns that it would threaten their operations if the court ruled in favor of Wiley.

Content producers, on the other hand, backed the book publisher and argued that Kirtsaeng's position would make it difficult for their businesses to compete abroad. 

Justice Ruth Bader Ginsburg, along with Anthony Kennedy and Antonin Scalia, criticized the court's decision in a dissenting opinion and stood by the lower court's earlier ruling on the case.

"The court today adopts an interpretation of the Copyright Act at odds with Congress' aim to protect copyright owners against the unauthorized importation of low-priced, foreign-made copies of their copyrighted workers," the opinion reads. "The court's bold departure from Congress' design is all the more stunning, for it places the movement for 'international exhaustion' of copyrights — a movement the United States has steadfastly resisted on a world stage."

Stephen Smith, CEO of John Wiley & Sons, expressed disappointment in the Supreme Court's decision and called it a "loss" for the U.S. economy.

"We are disappointed that the U.S. Supreme Court has decided in favor of Supap Kirtsaeng and overturned the Second Circuit’s ruling," Smith said in a statement. "It is a loss for the U.S. economy, and students and authors in the U.S. and around the world."

Smith thanked the various companies and associations that backed Wiley's position, including Omega, the Business Software Alliance, American Bar Association and the motion picture and recording industries.

Tom Allen, CEO of the American Association of Publishers, said the Supreme Court's decision will have major ramifications for Americans who produce books, movies, music and other content.

"The court’s interpretation of the ‘first sale’ provision of US copyright law will discourage the active export of US copyrighted works," Allen said in a statement. "It will also reduce the ability of educators and students in foreign countries to have access to US-produced educational materials, widely considered the world’s gold standard."

Groups representing Web companies and copyright reform advocates lauded the Supreme Court's decision on Tuesday, saying it affirms people's right to sell or lend goods they bought and own regardless of where those goods were made. But they also argued that the decision highlights the need for broader copyright reform.

"This decision is a landmark win for consumers, small businesses, online marketplaces, retailers and libraries nationwide," said Andrew Shore, executive director of the Owners' Rights Initiative (ORI), in a statement. Shore's organization counts eBay, Overstock.com, Etsy and the American Library Association as members.

“While we are energized by this decision, we expect that some will continue attempts to eliminate owners’ rights, reduce competition in the marketplace and restrict the global trade of authentic goods," Shore added. "ORI will continue to be vigilant and diligent in protecting owners’ rights now and in the future and we expect policymakers to do the same.”

Sherwin Siy, vice president of legal affairs at advocacy group Public Knowledge, echoed a similar message.

"We were almost in a situation where anyone that held a garage sale or loaned a book to a friend could be in violation of copyright law," Siy said in a statement. "We believe that this is evidence that a larger conversation about copyright reform is in order, to restore the balance of the law between the interests of authors, copyright holders and the public."

The case had centered around the interpretation of the phrase "lawfully made" found in copyright law. Wiley had argued that the phrase is defined as "lawfully made under the copyright laws of the United States," therefore Kirstaeng ran afoul of the copyright law by not asking the book publisher for permission before he sold copies of Wiley-copyrighted books on eBay.

Yet Breyer wrote that the court concluded that Kirstaeng's "non-geographical interpretations of the words 'lawfully made under this title' are more persuasive."  

— This post was updated at 4:22 p.m.

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