Kirtsaeng v. John Wiley & Sons, Inc.
568 U. S. 519 (2013) (2013)
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Rule of Law:
The “first sale” doctrine, which limits a copyright owner's exclusive right to distribute copies of their work, applies to copies of a copyrighted work lawfully made abroad with the copyright owner's permission, thereby allowing their resale or other disposition in the United States without further authorization.
Facts:
- John Wiley & Sons, Inc. (Wiley), an academic textbook publisher, assigns rights to its wholly owned foreign subsidiary, John Wiley & Sons (Asia) Pte Ltd. (Wiley Asia), to publish, print, and sell foreign editions of Wiley’s English-language textbooks abroad.
- Wiley Asia’s foreign edition textbooks contain language stating they are authorized for sale only in specific territories outside the United States and are not to be taken into the United States without permission.
- Supap Kirtsaeng, a citizen of Thailand studying in the United States, arranged for his friends and family to purchase these foreign edition textbooks in Thai book shops, where they were sold at lower prices.
- Kirtsaeng had these books mailed to him in the United States, where he then sold them, reimbursed his family and friends, and kept the profit.
Procedural Posture:
- John Wiley & Sons, Inc. (Wiley) filed a federal lawsuit against Supap Kirtsaeng in a United States District Court for copyright infringement.
- The District Court held that Kirtsaeng could not assert the “first sale” defense because, in its view, the doctrine does not apply to foreign-manufactured goods.
- A jury found that Kirtsaeng had willfully infringed Wiley’s American copyrights and assessed statutory damages.
- On appeal, a split panel of the United States Court of Appeals for the Second Circuit affirmed the District Court's decision, concluding that the “lawfully made under this title” language in §109(a) meant the “first sale” doctrine does not apply to copies of American copyrighted works manufactured abroad.
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Issue:
Does the “first sale” doctrine under 17 U.S.C. §109(a) apply to copies of a copyrighted work that were lawfully manufactured and initially sold abroad with the copyright owner’s permission?
Opinions:
Majority - Justice Breyer
Yes, the “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad. The Court held that the phrase “lawfully made under this title” in 17 U.S.C. §109(a) imposes a non-geographical limitation, meaning made “in accordance with” or “in compliance with” the Copyright Act, rather than requiring the copies to be manufactured in the United States. This interpretation aligns with the statutory language, which says nothing about geography, and the traditional copyright objective of combating piracy. The Court noted that geographical interpretations present linguistic difficulties and give the word “lawfully” little work. Historically, the predecessor to §109(a) also did not impose geographical limitations, and the 1976 Copyright Act’s changes primarily aimed to clarify that lessees, not owners, are not covered by the doctrine. Other statutory provisions, like §109(c) (public display) and §110(1) (educational use), would produce absurd results under a geographical interpretation. The common-law “first sale” doctrine has an “impeccable historic pedigree” and makes no geographical distinctions. The Court found that a geographical interpretation would create serious practical problems for libraries, used-book dealers, technology companies, retailers, and museums, potentially requiring them to seek permission for distributing or displaying lawfully purchased foreign-made goods. While acknowledging its prior statement in Quality King Distributors, Inc. v. L’anza Research Int’l, Inc. about copies “lawfully made under this title” being presumably only those made in the U.S., the Court dismissed this as dictum. The Court also rejected arguments that a non-geographical interpretation would make §602(a)(1) superfluous (citing examples where it would still apply to non-owners or pre-sale transfers) or that it would make market segmentation impossible, stating that copyright law does not inherently provide a right to divide international markets.
Concurring - Justice Kagan
Yes, the “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad. Justice Kagan concurred, emphasizing that neither the text nor the history of §109(a) supports a geographical limitation. She recognized that the decision, combined with Quality King, significantly narrows §602(a)(1)'s ban on unauthorized importation. However, she suggested that any issues with this limitation stem from Quality King's holding that §109(a) limits §602(a)(1), not from the present Court's correct construction of §109(a). She argued that reversing Quality King (i.e., allowing copyright owners to restrict imports regardless of first sale) would offer a more sensible approach to market segmentation by targeting unauthorized importers, rather than imposing downstream liability on innocent purchasers, as the dissent's approach would do.
Dissenting - Justice Ginsburg
No, the “first sale” doctrine does not apply to copies of a copyrighted work lawfully made abroad. Justice Ginsburg dissented, arguing that the majority's interpretation is at odds with Congress's intent to protect copyright owners against unauthorized importation of low-priced foreign-made copies. She maintained that “lawfully made under this title” means the copy's creation is governed by and complies with U.S. copyright law, which does not apply extraterritorially. Therefore, foreign-made copies are not “lawfully made under this title,” and §109(a) should not apply. This reading, she contended, gives meaningful effect to §602(a)(1)'s import prohibition and its specific exceptions, which would otherwise be rendered superfluous. The dissent emphasized that the legislative history of §602(a)(1) clearly shows Congress's intent to allow copyright owners to segment international markets and provide a remedy against third-party importers of lawfully made foreign copies. She also noted that the United States has consistently resisted international exhaustion in trade negotiations. While acknowledging the “horribles” raised by the majority, she argued that existing common law principles (like Bobbs-Merrill’s exhaustion of the “vend” right upon first authorized U.S. sale) and statutory provisions (like §602(a)(3)’s exceptions and fair use) mitigate these concerns, demonstrating that the anticipated problems are “largely imaginary” or easily addressed.
Analysis:
This case significantly clarifies the scope of the “first sale” doctrine in copyright law, extending its protections to goods lawfully manufactured and first sold abroad. This ruling curtails copyright holders' ability to segment international markets and charge different prices in different regions by preventing the parallel importation of foreign-made copies. It has substantial implications for industries that rely on copyright, from textbooks and software to consumer goods and art, by affirming the right of subsequent owners to resell or otherwise dispose of lawfully acquired copies, regardless of their origin. The decision reinforces the common-law principle against restraints on alienation and prioritizes free trade and competition in the secondary market over a copyright owner's desire for global market control. Future cases will likely explore the remaining scope of §602(a)(1) as outlined by the majority, particularly concerning goods held by non-owners or prior to an authorized first sale.
