Cheap (Foreign) Textbooks for Sale: The “First Sale” Doctrine and Imported “Used” Textbooks

Photo Credit greenasian of Flickr

By Daniel Shickich

In a victory for American college students and foreign entrepreneurs, the United States Supreme Court declared Tuesday that the “first sale” doctrine protects resellers of textbooks from copyright infringement, even when they move the goods across national boundaries. The suit arose when academic textbook maker John Wiley & Sons, Inc. sued Supap Kirtsaeng, a Thai student-entrepreneur, for infringing their copyright. As part of its international publishing business, John Wiley & Sons assigns rights to publish, print, and sell foreign editions of its English-language textbooks abroad to its wholly owned foreign subsidiary, Wiley Asia. Included in books published by Wiley Asia is a disclaimer stating that the books are not to be taken without permission into the United States. The books sold at a significantly cheaper price in Thailand than in the United States.

Kirtsaeng, who moved from Thailand to the United States to study mathematics, began asking friends and family in Thailand to purchase the cheaper foreign edition English-language textbooks in Thailand, and then mail the textbooks to him in the United States. Kirtsaeng then sold the textbooks to students in the United State via eBay. This proved to be a very profitable endeavor; at trial, lawyers for John Wiley & Sons claimed they had obtained evidence of receipts totaling $1.2 million over the life of Kirtsaeng’s business.

John Wiley & Sons argued that Kirtsaeng’s profits should be barred under 17 U.S.C. § 106(3), which grants the copyright owner the “exclusive rights” to “to distribute copies . . . of [a] copyrighted work” and makes importing a copy made abroad without the copyright owner’s permission an infringement, qualified by several limitations. One of those limitations is the “first sale” doctrine. Under the first sale doctrine, “the owner of a particular copy . . . lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy” 17 U.S.C. § 109(a). Kirtsaeng argued that this limitation made his resale of the books legal. John Wiley & Sons argued that the phrase “lawfully made under this title” imposed a geographical limitation that prevented the first sale doctrine from applying to Wiley Asia’s books.

A jury found in favor of John Wiley & Sons and granted the company $600,000 in damages. The U.S. Court of Appeals for the Second Circuit affirmed. Kirtsaeng appealed to the Supreme Court, arguing that his business was protected by the “first sale” doctrine. In a 6-3 decision, a majority of the high Court agreed with Kirtsaeng. The majority opinion, authored by Justice Steven Breyer, concluded that “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad. The majority rejected the publisher’s geographically limited interpretation, noting that 17 U.S.C. § 109(a) says nothing about geography and a non-geographical interpretation provides each word in the phrase “lawfully made under this title” with a distinct purpose. According to Justice Breyer, this simple, non-geographical reading promotes the traditional copyright objective of combating piracy and makes word-by-word linguistic sense.

Commentators are heralding the Court’s decision as a vindication of the first sale doctrine, reaffirming the right of the owner of a particular copy of a work to do whatever she wants with it after purchasing it, and making it clear that “digital commerce can flourish in the Internet era, even when it crosses borders.” But for college and graduate students in the United States, the outcome of the decision may be even more simple: access to cheaper textbooks might have just gotten a bit better.