March 29, 2023

Supreme Court Hears Copyright Case on Imported Textbooks

WASHINGTON — The Supreme Court heard arguments on Monday in a copyright case about the sale of imported textbooks on eBay that has wide-ranging implications for many products made abroad and sold in the United States.

The case arose from the entrepreneurial impulses of Supap Kirtsaeng, a Thai student who attended Cornell University and the University of Southern California. He helped pay for his education by selling textbooks that his friends and relatives had bought abroad and shipped to him.

Publishers of textbooks, like other manufacturers, often charge different prices in different markets. One publisher, John Wiley Sons, successfully sued Mr. Kirtsaeng for copyright infringement.

The general rule for products made in the United States is that the owners of particular copies can do what they like with them. If you buy a book or record made in the United States, for instance, you are free to lend it or sell it as you wish. The question for the justices was whether that rule, called the first-sale doctrine, also applies when the works in question were made abroad.

The answer turns on a phrase in the Copyright Act, which appears to limit the first-sale doctrine to works “lawfully made under this title.” The lower courts said that textbooks manufactured outside the United States cannot have been made under American law and so remained subject to the control of the owner of the copyright.

Much of the argument concerned what lawyers call the “parade of horribles” — the hypothetical problems that might follow a ruling in favor of one side or the other.

E. Joshua Rosencranz, a lawyer for Mr. Kirtsaeng, said the happenstance of where a record was made should not alter the rights of the person who buys it. Otherwise, he said, “the result is that a teacher can go and buy a Beethoven record and play it to her class if it was made in the United States,” he said. “But if she flips one past it to the next Beethoven record that happens to have been made in Asia, she can’t play that for her class.”

Worse, he said, the ability to retain control of copyrighted works made abroad provides manufacturers with a powerful incentive to ship jobs overseas.

Justice Stephen G. Breyer asked a series of hypothetical questions, starting with whether he was permitted to buy a book abroad and give it to his wife.

“Imagine Toyota,” he went on. “Millions sold in the United States. They have copyrighted sound systems. They have copyrighted GPS systems. When people buy them in America, they think they’re going to be able to resell them.”

He gave other examples: “libraries with three hundred million books bought from foreign publishers that they might sell, resell or use” and “museums that buy Picassos.”

Theodore B. Olson, a lawyer for the publisher, said that none of those things were before the court. “When we talk about all the horribles that might apply in cases other than this — museums, used Toyotas, books and luggage, and that sort of thing — we’re not talking about this case.”

Justice Anthony M. Kennedy responded that “you have to look at those hypotheticals in order to decide this case” so that the justices understand the consequences of their ruling.

Mr. Olson said there might be provisions of the copyright laws that allowed some gifts and resales. He gave the example of the fair use defense, which protects some reproductions of copyrighted works for criticism, research and similar purposes.

Chief Justice John G. Roberts Jr. said that defense would not carry much weight in many of the hypothetical cases.

“It seems unlikely to me that, if your position is right,” the chief justice told Mr. Olson, “that a court would say, it’s a fair use to resell the Toyota, it’s a fair use to display the Picasso.”

In 2010, the court considered essentially the same question in Costco Wholesale Corp. v. Omega S.A. But Justice Elena Kagan did not participate in that case — presumably because she worked on it when she was solicitor general — and the rest of the justices split 4-to-4, which upheld the decision. All nine justices heard the case argued Monday, Kirtsaeng v. John Wiley Sons, No. 11-697.

Justice Kagan was an active questioner but did not indicate which way she was planning to cast her presumably decisive vote.

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