On March 19, 2013, the Supreme Court reached a decision in Kirtsaeng v. John Wiley & Sons, Inc. In this case, respondent John Wiley & Sons, Inc. ("Wiley"), a publisher, brought suit against Petitioner Supap Kirtsaeng alleging violation of the Copyright Act, under Title 17 U.S.C. §§ 101-810. Kirstaeng a student in the United States, studying mathematics at Cornell University and the University of Southern California, sold textbooks to help pay for his education and living expenses. Kirtsaeng's relatives would buy these textbooks in Thailand, where they live, and ship them to Kirtsaeng, who would sell the textbooks in America once he was done using them for his classes. Wiley's subsidiaries in Thailand manufactured these textbooks.
Wiley contended that by selling foreign manufactured textbooks in America, Kirtsaeng was violating Title 17 U.S.C. § 602(a)(1) of the Copyright Act. According to 17 U.S.C. § 602(a)(1), a copyright owner's exclusive distribution right encompasses the importation of copyrighted work into the United States. Importing copyrighted work into the United States without the consent of the copyright owner constitutes a violation of copyright law. Under copyright law, a copyright owner has the exclusive right to distribute copies of a copyrighted work to the public. However, Kirtsaeng argued that the First Sale Doctrine protects him from any liability because according to the doctrine the copyright owner loses an exclusive interest in copyrighted work after the first sale. The First Sale Doctrine, which is codified under Title 17 U.S.C. § 109, limits copyright owners' distribution right to the first sale of the copyrighted work. Once the work is transferred, the copyright owner no longer retains an interest in the work.
In its opinion, the Supreme Court held that copyright law, and specifically the First Sale Doctrine, applies to copyrighted works manufactured abroad. Accordingly, copyright owners, such as the publisher in this case, lose their distribution rights and interests in a foreign manufactured copyrighted work after the first sale of the work. As such, Wiley lost its exclusive distribution right in the textbooks when its subsidiaries first sold the textbooks to Kirtsaeng's relatives in Thailand. When the relatives then sent the textbooks to Kirtsaeng, who proceeded to resell the textbooks in America, Wiley no longer retained a copyright interest in the textbooks.
The president and CEO of John Wiley & Sons stated that the Court's ruling would serve as a blow to the U.S. economy. The ruling will certainly have negative repercussions for publishers since consumers will be able to buy textbooks from foreign manufacturers and resell them in America, thereby reducing the cost of textbooks for American students. The decision in this case will also likely resolve Ganghua v. Pearson Education, Inc., which is another case pending before the Supreme Court.
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