Supreme Court Will Hear Case Over Foreign Textbooks Imported and Resold in U.S.

April 16, 2012

Is it legal to buy textbooks and other copyrighted works overseas, where they may be much cheaper, and resell them in the United States? The U.S. Supreme Court will take up that question in its next term, when it hears arguments in Supap Kirtsaeng v. John Wiley & Sons. The case could have major implications for publishers intent on protecting the market for copyrighted works. It's also being watched closely by librarians concerned that it could undermine the first-sale doctrine, which allows the buyer of a copyrighted work to lend or sell it without permission from the rights holder.

Two years ago, in the case Costco v. Omega (No. 08-1423), the court split on whether the first-sale doctrine applied to imported goods. That case pitted the watchmaker Omega against the Costco wholesale chain over its discount pricing of Omega watches. The U.S. Court of Appeals for the Ninth Circuit sided with Omega, finding that the first-sale doctrine did not apply to items manufactured outside the United States.

The Supreme Court's split vote, a 4-to-4 tie, left the Ninth Circuit's decision intact but did not set a nationwide precedent. "Indeed, the ruling brought into question a potentially huge swath of materials, including works printed by U.S. publishers, aiming to save on production costs, in China and elsewhere," Library Journal reported at the time.

With Kirtsaeng v. Wiley, No. 11-697, the court has another chance to rule on the issue. The plaintiff is a Thai national who was studying for an undergraduate degree at Cornell University and had his family send him copies of Wiley textbooks that had been printed and purchased abroad. He then resold them on eBay. According to evidence presented at trial and cited in a decision last summer by a federal appeals court, Mr. Kirtsaeng made from $900,000 to $1.2-million from the sales, suggesting that he was not merely reselling his own textbooks but was running a business.

Wiley sued him for copyright infringement, but Mr. Kirtsaeng invoked the first-sale doctrine in his defense. In August 2011, the U.S. Court of Appeals for the Second Circuit upheld a lower court's ruling that the first-sale principle applied only to U.S.-made works. The high court will hear arguments in the case this fall, with a ruling expected by June 2013.

"The Second Circuit correctly concluded that those seeking to profit from the creative works of others cannot evade our intellectual-property laws by importing copies from overseas," said Susan Spilka, vice president for corporate communications at Wiley. "We look forward to defending that decision in the Supreme Court."

Nancy Sims, the program copyright librarian at the University of Minnesota, underscored the potential importance of the case for American libraries, which hold many works printed abroad. "The most obvious implication for libraries is we loan things under first-sale," Ms. Sims said. "Can we not now lend imported books in our collections?"

The case has the potential to affect many categories of copyrighted work. In a blog post on Monday, the advocacy group Public Knowledge wrote: "This ruling could cripple markets for used books, movies, CD's, toys, and any other goods that contain copyrighted works. For example, many cars contain copyrighted computer programs, so used-car sales for foreign-manufactured would become illegal (without the copyright owner's permission)."

Correction (4/17/2012, 2:23 p.m.): This article originally stated imprecisely the source of the information on how much money Mr. Kirtsaeng realized from the sale of books. The source was evidence presented at trial and cited by a federal appeals court in its ruling on the case. The information did not appear only in news reports on the case. The article has been updated to reflect this correction.