Breaking News – US Supreme Court Issues Eagerly Anticipated Decision in First Sale Doctrine Case

In a 6-3 decision, the United States Supreme Court found that the copyright doctrine known as the “first sale doctrine” applies to copyrighted items purchased outside the United States but re-sold in the United States.  The case is Kirtsaeng v. John Wiley & Sons, Inc. and the decision can be found here:  http://www.supremecourt.gov/opinions/12pdf/11-697_d1o2.pdf.

Explained simply, the “first sale doctrine” means that the copyright protection for an otherwise protected work ceases to exist upon the “first sale” of the work. In other words, the copyright owner only has control of the work through the first sale. Therefore, you can re-sell CDs and DVDs, artwork, books, electronics, and all manner of other works to whomever you please after the first sale. Swap meets and websites like eBay and Craigslist exist in large part because of the protection of the first sale doctrine.

The Kirtsaeng case challenged the first sale doctrine in an important way. In the Kirtsaeng case, the issue was whether copyright holders of works that were made outside the US can require that a person have the copyright holder’s permission for resale. A lower appellate court said yes, thereby seriously undermining the first sale doctrine.

The Supreme Court reversed, holding that the language of the statute that sets forth the first sale doctrine, as well as the context of the statute and the common law history of the first sale doctrine favored an interpretation of the doctrine that was not geographically limited.  The Supreme Court also noted that a geographic limitation on the first sale doctrine would threaten ordinary scholarly, artistic, commercial and consumer activities, which were harms that Congress could not have intended in enacting the first sale doctrine.

The significance of the Kirtsaeng case cannot be overstated.  Had the Supreme Court accepted a geographically limited interpretation of the first sale doctrine as urged by the respondent, copyright owners would have had a strong incentive to shift the manufacture of their works outside the US, which would have allowed them to obtain almost perpetual control over the re-distribution of their works. The danger of such a result was obvious on many levels, and would have severely damaged re-sale e-commerce sites like eBay and Craigslist.  Fortunately, the Supreme Court adopted a practical, common sense interpretation and the first sale doctrine is safe.

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