WASHINGTON — In a pair of decisions issued on Tuesday, the Supreme Court made it easier to import textbooks and other copyrighted products from abroad and made it harder for plaintiffs in class-action suits to stay out of federal court.
The copyright case, Kirtsaeng v. John Wiley Sons, No. 11-697, arose from the activities of a Thai student who attended Cornell University and the University of Southern California. The student, Supap Kirtsaeng, helped pay for his education by selling textbooks that his friends and relatives had bought in Thailand at low prices and shipped to him.
A publisher of some of the textbooks, John Wiley Sons, sued Mr. Kirtsaeng for copyright infringement, and it won $600,000 in the lower courts. In a 6-to-3 decision, the Supreme Court threw out that award and ruled that imported copyrighted goods were subject to the same rules as goods bought in the United States: owners of particular copies can do what they like with them.
In legal jargon, the court applied the first-sale doctrine to copyrighted materials from abroad. Under that doctrine, buyers of books, records and other copyrighted goods may lend or sell them as they wish.
The decision will have consequences for all manner of products, including books, records, art and software. Industry groups had told the justices that a decision permitting copyrighted foreign goods to be sold in the United States would limit their ability to sell materials more cheaply in developing markets and result in higher prices overall.
The case turned on a phrase in the Copyright Act, which limits the first-sale doctrine to works “lawfully made under this title.” The lower courts said that textbooks manufactured outside the United States could not have been made under American law and so remained subject to the control of the owner of the copyright.
Justice Stephen G. Breyer, writing for the majority, said the phrase was not concerned with geography. He said he doubted “that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial and consumer activities.”
Much of his opinion concerned the potential consequences of a contrary ruling, one that he said “could prevent a buyer from domestically selling or even giving away copies of a video game made in Japan, a film made in Germany or a dress (with a design copyright) made in China.”
He buttressed the point by surveying supporting briefs from libraries, used-book dealers, technology companies and museums, all of which warned that allowing copyright suits over goods imported from abroad would have pernicious consequences. Libraries could be barred from lending foreign books, the briefs said, and museums from displaying foreign art.
In their own briefs, Wiley and its allies discounted this “parade of horribles” as unrealistic. Justice Breyer responded, “We are not so sanguine.” The possible practical problems of ruling the other way, he said, “are too serious, too extensive and too likely to come about for us to dismiss them as insignificant — particularly in light of the ever-growing importance of foreign trade to America.”
An aside in a 1998 decision suggested that the court would rule differently on Tuesday, but Justice Breyer said the court was free to ignore a statement made in passing. “Is the court having once written dicta calling a tomato a vegetable bound to deny that it is a fruit forever after?” he asked.
Chief Justice John G. Roberts Jr. and Justices Clarence Thomas, Samuel A. Alito Jr., Sonia Sotomayor and Elena Kagan joined the majority opinion.
Justice Ruth Bader Ginsburg, joined by Justice Anthony M. Kennedy and, for the most part, Justice Antonin Scalia, dissented, saying the majority’s “bold departure from Congress’s design” was “stunning.” She added that there were many ways to address “the anticipated horribles” that Justice Breyer had outlined.
“It should not be overlooked,” she wrote, “that the ability to prevent importation of foreign-made copies encourages copyright owners such as Wiley to offer copies of their works at reduced prices to consumers in less developed countries who might otherwise be unable to afford them.”
In the class action case, Standard Fire Insurance Company v. Knowles, No. 11-1450, the court unanimously ruled that plaintiffs’ lawyers cannot avoid the requirements of a federal law that allows some kinds of class actions to be moved from state to federal court by promising to accept less money than the class might be owed.
The law, the Class Action Fairness Act of 2005, allows defendants to move some big class actions out of state courts thought to be hostile to business interests as long as the proposed class has more than 100 members, at least one of them is from a different state than a defendant and the amount at stake is more than $5 million.
The case concerned the Standard Fire Insurance Company, which is based in Connecticut and was accused in a proposed class action filed in Arkansas of failing to make full reimbursements for property damage claims. The plaintiffs’ lawyers stipulated that they would limit to $5 million the amount sought by the lead plaintiff and the class he sought to represent.
Justice Breyer, writing for the court, said the tactic would not work. “Stipulations must be binding,” he wrote. But, he said, “a plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified.”
Article source: http://www.nytimes.com/2013/03/20/business/supreme-court-eases-sale-of-certain-products-abroad.html?partner=rss&emc=rss
Speak Your Mind
You must be logged in to post a comment.