WASHINGTON, D.C. — The notoriously complex and difficult world of copyright law took on yet another twist last week after the U.S. Supreme Court heard oral arguments in Kirtsaeng v. John Wiley and Sons, Inc., a case that will be closely watched by those who make their living buying and selling creative material — including visual art.
The court’s decision on the suit, which experts expect will come down to a close 5-4 vote, will have broad consequences over the rights of copyright holders in the creative fields — particularly those who believe they should be entitled to royalties and control over creative material that is bought and sold more than once. In many ways, the case — which concerns the resale of overseas-reprints of textbooks — resembles the dispute over the California Resale Royalties Act, which reached a high point last year when artists including Chuck Close and Robert Graham went to court trying to claim a percentage in the profits made on works of art that had been sold on the secondary market.
But the issue becomes all the more tricky when international frontiers are involved. While living in the United States and attending graduate school, Thai student Supap Kirtsaeng decided he could make a bit of cash by selling textbooks — specifically, books that had originally been published by an American firm but manufactured by a company with a license to print them in Thailand.
Because manufacturing costs in the Far East were much lower, Kirtsaeng's family was able to find books that had been printed at a fraction of the cost of similar American editions. Operating in the so-called “gray market,” he made some $100,000 in profits when he sold the Thai-printed books on eBay to customers back in the United States.
Kirtsaeng believed what he was doing was legal, but American publisher John Wiley and Sons took issue. When they found out that their books were among those distributed by Kirtsaeng, they sued for damages, asserting that he had infringed on their exclusive rights to sell or import their licensed material. The district court awarded Wiley $600,000; the Second Circuit Court of Appeals upheld the decision.
Speaking before the Supreme Court last week, Kirtsaeng’s counsel asserted that this was a mistake, citing the “first sale doctrine,” which allows the owner of a copy of a licensed work the right to sell or distribute it on the secondary market.
On the surface of things, the wording of the Copyright Act is on Kirtsaeng’s side. “The owner of a particular copy or phonorecord lawfully made under this title,” Section 109(a) reads, “is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”
Not surprisingly, however, lawyers for the American publisher have a much different take on this section. They argued that because the textbooks sold by Kirtsaeng had been manufactured in Thailand, outside of the domain of United States law, the phrase “lawfully made under this title” did not apply. In this interpretation, the first sale doctrine could not be enforced on copyrighted material that had come to being outside the borders of the U.S.
Meanwhile, Kirtsaeng’s counsel insisted that so long as the books were printed with Wiley’s permission and purchased legitimately, he was within his rights to sell the books in the United States at will. Hinting that a profound revision of the “first sale doctrine” would place severe limits on businesses and institutions to sell or distribute a licensed piece of creative material, Kirtsaeng’s lawyers argued that allowing Wiley to block the secondary sale of creative material would give copyright holders “endless, eternal downstream control over sales and rentals” of their property, according to a report in Business Week.
The art world, in particular, would not be untouched by this radical change in behavior. “If someone in the U.S. owned a painting that they had purchased from someone who made it overseas, and you purchase the painting here,” Columbia law professor Ronald Mann told ARTINFO, “the copyright would prevent you from reselling the painting without their permission.”
Speaking to Wiley’s lawyer, Theodore B. Olson, Justice Breyer seemed ready to reveal his disposition on the issue when he described a scenario in which the owner of a Toyota could be prevented from re-selling his car if it contained sound or GPS systems protected by a copyright.
“If I am looking for the bear in the mouse hole, I look at those horribles, and there I see that bear,” he said, according to SCOTUSblog.org. “I’m asking you to spend some time telling me why I’m wrong.”