Special to the Fort Worth Business Press
The global marketplace now extends to books and other copyrighted works. This will make it more difficult to sell a book at a higher price in the U.S. than outside of the U.S. That’s the practical impact of a Supreme Court case holding that the first sale doctrine applies to copyrighted works made lawfully abroad. Supap Kirtsaeng came from Thailand to the U.S. to attend college. He had relatives buy textbooks at home and ship them to the U.S., where he sold the books for a profit on eBay using the online name Bluechristine99. What made his business work was the price disparity between textbooks in the U.S. and overseas. Books in third-world countries are cheaper, even when shipping costs are tallied in. Publishers, of course, know this and have handled it by using an “All Rights Reserved” clause in their copyright notice. In Wiley’s case, its books sold outside the U.S. contained a notice that books sold in Asia, etc. could not be exported out of those territories. This is standard stuff when dividing the market between high-price territories and lower-price territories. The copyright statute provides a first sale doctrine that essentially says the sale of a copyrighted work exhausts the copyright in that work, freeing the owner to do what he or she wants with that particular copy. The owner can read the book, resell it, etc. This is not a case where someone duplicated a book and resold it. Bluechristine’s books were lawfully bought overseas. In other words, Wiley approved the overseas sale. That fact was critical to the Supreme Court. Occasionally, lawyers make up words and insert them into the law. The copyright statute governing the first sale doctrine refers to the owner of a copy “lawfully made under this title.” Wiley’s lawyers said this really meant a copy ”lawfully made under this title and in the United States of America.” See how easy it was to add language to the statute? The court didn’t buy the additional language. Part of its reasoning had to do with plain reading; don’t add words to a statute. But another part of its reasoning had to do with the long-standing tradition of publishers reserving their rights by way of copyright notices and customers having the equally long-standing tradition of ignoring those notices. People go abroad, buy books and bring them back into the U.S., either for personal use or business. Libraries, used book dealers, museums all buy copyrighted stuff overseas and bring it home. There is also a booming trade of electronics coming ashore, which contains copyrighted software. The court called this the common law and said the statute didn’t change this practice. Could publishers have headed this off by objecting earlier? Maybe by suing a used book dealer back in the 1970s when the statute was first passed. But the quantities and thus the damages would likely have been small. Most companies don’t bring cases purely for the symbolism because of the cost. And how could publishers decades ago have anticipated the online book marketplace of the bluechristine99s of the world? It’s worth noting that the court said Congress can change the statute if it wishes to come up with a different result. Today, the Registrar of Copyrights is calling for the copyright law to be updated on a number of issues. Publishers could use this as an opportunity to modify the first sale doctrine, but it won’t be an easy fight. Here’s the link to the Registrar’s remarks: http://www.copyright.gov/regstat/2013/regstat03202013.html
Geoff Mantooth, a patent and trademark attorney, is a shareholder in Decker, Jones, McMackin, McClane, Hall & Bates, P.C. in Fort Worth. He writes The Patent Trade, a law blog about intellectual property — patents, trademarks, trade secrets and copyrights.