First Sale Doctrine

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Kirtsaeng v. Wiley: Supreme Court Creates New Class of Business Venture

Posted by on Mar 27, 2013 in Copyright, First Sale Doctrine

The Supreme Court decided this week the case of Kirtsaeng v. John Wiley & Sons. The opinion will undoubtedly have a large impact on intellectual property law. This case deals with a Thai national who was subsidizing his college tuition in the U.S. by having his relatives in Thailand buy textbooks for cheap, shipping them to him in the US, and then selling the text books to Americans on sites such as eBay. He made about a $100,000 profit off this enterprise. Eventually, the publisher caught wind, and sued. This enterprise is known as the “gray market”. Exploiting the price differential between the US and overseas can be quite profitable. The legality of this practice differs depending on the type of good being sold. Prior to this ruling, on copyrighted goods purchased overseas, most judges were ruling against the gray marketeers. Kirtsaeng argued that the ‘first sale doctrine’ creates an exception that validates his actions. The “first sale doctrine” in copyright law permits the owner of a lawfully purchased copy of a copyrighted work to resell it. Once you buy a copy of something, you own that copy. You can do as you wish with it. This is codified at 17 U.S.C. § 109(a) of the Copyright Act of...

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Foreign Manufactured Goods and the First Sale Doctrine

Posted by on Jul 16, 2012 in Copyright, Fair Use, First Sale Doctrine

On July 9, 2012, The Association of Art Museum Directors along with nearly 30 American museums including MoMA, LACMA, the Guggenheim, the Getty, the Whitney, SFMOMA,the Art Institute of Chicago, and the Dallas Museum of Art submitted an amicus brief  to the Supreme Court. The brief comes as a response to a recent decision by the Second Circuit to limit the protections under Section 109 of the Copyright Act to works created within the United States in John Wiley & Sons v. Kirtsaeng. As a result, many museums feel that the way they operate may be in jeopardy, much like libraries and many gray market businesses. The Kirtsaeng case follows the Supreme Court’s December 2010 decision in Costco Wholesale Corp. v. Omega, which centered on the first-sale doctrine, which usually entitles the owner of a lawfully produced copyrighted work to resell it without permission from the copyright holder. The Supreme Court split 4-4, with Justice Elena Kagan not taking part. The court did not issue a written opinion, but held that the first-sale doctrine did not apply to foreign goods. The Second Circuit’s Kirtsaeng decision relied on the Supreme Court’s Costco ruling. In the present case on appeal, Supap Kirtsaeng, a graduate student at the University of Southern California,...

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