US Supreme Court to Hear Arguments in Seminal Intellectual Property Case

Arguments in a seminal copyright case are being heard at the US Supreme Court this week, as Supap Kirtsaeng defends his right to have imported to America and resold copies of textbooks produced and distributed in Asia.  The books were produced in Asia by the American publishing house John Wiley & Sons and meant for distribution only within Asia.  Kirtsaeng, originally from Thailand, began importing these lower-priced copies and selling them at a profit to American students while he studied at an American university.  John Wiley & Sons has now sued him for damages.

There are a number of points of law to be untangled in an analysis of this case.  Firstly, there is the “first sale doctrine,” which dictates that the producer of the good or owner of the intellectual property can only profit from the first sale of that item.  If a consumer lawfully purchases a copyrighted item, they can they go on to sell it at their leisure if they choose to do so.  Possibly conflicting with this are the laws that govern foreign distribution rights.  While the “first sale doctrine” clearly applies to goods produced and purchased within the United States, does it apply to goods produced and purchased elsewhere in the world?

Policy factors will undoubtedly figure in the judges’ decisions, as a finding against Kirtsaeng could have weighty consequences.  If foreign-produced goods were no longer allowed to be resold or otherwise redistributed within the United States, institutions like libraries would face serious turmoil.  Companies would have incentive to move all their factories out of the United States, as every resale of their foreign-produced product would entitle them to a cut of the proceeds.  Lastly, the continuing growth of internet-based transactions would make ascertaining just where something like an e-book or computer program was produced and sold very challenging.

Given the possible impact of the case, it has garnered attention from not only the copyright and intellectual property law field, but from the Obama administration, publishing companies, and a number of other groups representing consumer and retail interests.  While all eyes are on the courtroom, it’s likely that Kirtsaeng’s are on his wallet – now a professor in Thailand, he’s stated he’ll be unable to pay any damages if Wiley & Sons wins.

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