Supreme Court Appears Divided on Copyright Case Affecting Libraries and Publishers

October 29, 2012

The U.S. Supreme Court heard oral arguments on Monday morning in a key copyright-infringement case, with justices asking pointed questions about the resale and reuse of protected works. Many of the questions homed in on possible consequences for individual buyers as well as libraries and other institutions, but did not suggest which way the court was leaning.

The outcome of the lawsuit, Kirtsaeng v. John Wiley & Sons (No. 11-697), has significant implications for publishers, academic libraries, and almost anyone who resells, lends, or displays copyrighted material made and bought outside the United States. The case centers on a dispute over textbooks produced by Wiley for foreign markets but imported to the United States and resold without the publisher's permission.

Supap Kirtsaeng, a Thai national, came to study at Cornell University in 1997. As a student there and later at the University of Southern California, Mr. Kirtsaeng had family members and friends at home buy and send him textbooks, which he turned around and resold here. Wiley sued him in 2008 for copyright infringement. In his defense, Mr. Kirtsaeng invoked the first-sale doctrine. That pillar of U.S. copyright law holds that someone who buys a copyrighted work has the right to use or resell it without asking for permission. (Used-book stores operate on this principle, for instance.)

As Hurricane Sandy bore down on this city—whipping up wind and rain outside the court, one of the few parts of the federal government that was open—the justices heard arguments from both sides about whether the first-sale doctrine applies to foreign-made books and other works controlled by U.S. rights holders. The lawyers debated interpretations of Section 109 of the 1976 Copyright Act, which says the first-sale doctrine applies to copyrighted goods "lawfully made under this title."

Mr. Kirtsaeng's lead lawyer, E. Joshua Rosenkranz, told the justices they faced "a stark choice" between two competing definitions of what "lawfully made" means. "We've got to first read what Congress wrote," he said, noting that "lawfully made under this title" could mean items manufactured abroad as well as in the United States.

Justice Ruth Bader Ginsburg responded that, according to his argument, goods sold anywhere should be subject to distribution control everywhere. That "runs against the distribution regime" that prevails around the world, she suggested.

Kagan as Swing Vote

Justice Elena Kagan took a notably active role in the questioning. She had recused herself in an earlier case, Costco v. Omega, in which the justices considered whether the first-sale doctrine applied to foreign-made works sold in the United States. The court split, 4 to 4, in that case, leaving intact a lower court's ruling but leaving the big question undecided.

Observers of Kirtsaeng v. Wiley look to Justice Kagan's vote to be pivotal this time. It was hard to tell from her questions, however, which way she might be leaning in the Kirtsaeng case. For instance, addressing the issue of how the phrase "lawfully made" should be interpreted, Justice Kagan told Wiley's lead lawyer, Theodore B. Olson, "I can kind of see it both ways."

Justice Stephen G. Breyer challenged the lawyers repeatedly about "all the horribles"—the worst-case scenarios laid out in briefs filed on behalf of Mr. Kirtsaeng by library and museum groups, booksellers, Internet companies, and others who resell, lend, or display works purchased elsewhere. Justice Breyer also wondered about individual people. Say a man picked up a book overseas and wanted to give it to his wife when he got home. Would that be illegal because the book had been imported without the permission of the copyright holder?

In an exchange with Mr. Olson, Justice Breyer asked about specific "horribles." Suppose "you are the lawyer for a university library, and your client comes to you and says, 'My God, I just read the Supreme Court opinion. It says that we can't start selling these old books or lending them,'" he told Mr. Olson. "What, as their lawyer, do you tell them?"

Mr. Olson replied that specific facts apply in each scenario and that "there are other defenses, including fair use," beyond the first-sale doctrine. When we're talking about Picassos in museum collections or books in suitcases, Mr. Olson replied, "we're not talking about this case." As for the worst-case scenarios, we've been talking about them for 30 years, he said.

Chief Justice John G. Roberts Jr. asked Mr. Olson whether any of the uses Justice Breyer had listed were fair use. "If your position is right," he told the lawyer, "it seems unlikely to me" that a court would say they counted as fair use.

Malcolm Stewart, deputy solicitor general, argued for the United States on behalf of Wiley. Justice Samuel A. Alito Jr. asked him which would be worse—having the market for copyrighted works broken up, as Wiley fears, or enabling the worst-case scenarios outlined by Mr. Kirtsaeng's side. Mr. Stewart said the worst-case scenarios were more fearsome but had not come to pass. Wiley has argued all along that libraries and museums, among others, are protected by specific exemptions in copyright law for educational, scholarly, and personal use of copyrighted material made and purchased outside the United States.

A ruling in the case is expected by the end of the court's term, in June.

Correction (10/31/12, 1:10 p.m.): This article originally said Mr. Kirtsaeng was a student at the University of California. He was not but was a graduate student at the University of Southern California. The article has been corrected to reflect that.