Have you ever purchased merchandise from eBay or Craigslist? Or shopped at a used book store, record shop, flea-market, or garage or yard sale? And it’s likely if you are over 13 years old, you have purchased movies, videos, TV shows, and music from iTunes, Amazon, or Barnes & Noble.
A common misconception by many people who purchase content, e.g., music, videos, images, photographs, is that they own the rights to that work. They think since they paid money for it, that they can do anything they want with it. WRONG!
The copyright holder is the one who creates the content, unless it is a work for hire. The purchaser is just one of many, who bought the book, rented the movie, or licensed the images from the copyright holder or the 3rd party licensee. Because you bought a book, does not mean you can make copies of that book.
To be clear the copyright holder and the purchaser of products are not one in the same. The U.S. Copyright Act grants to copyright holders a number of rights, which allows them to essentially do anything THEY want to do with THEIR copyright protected work. The non-copyright owner has limited rights in the copyright protected work of another. Among those limited rights includes the right to resell a book, photograph, DVD, or CD. What is not included is the right to duplicate those works.
The Copyright Act states that a copyright holder can only control the “first sale” of the product. Once they sell it to someone else, e.g., retailer, consumer, they cannot control who else gets it. Again, a purchaser is free to resell it to anyone they want. However, the issue at hand is that up until now, the Copyright Act has been interpreted to exclude application of the first sale doctrine to foreign sales of a US work.
Last month that all changed. The US Supreme Court, in a stunning decision, held that the first sale doctrine even applies to copies purchased abroad and sold even without the permission of the copyright owner. The U.S. Supreme Court’s ruling in Kirtsaeng v. John Wiley & Sons ruling provides that a legally obtained copyrighted work can be imported into the U.S. and resold without permission from the copyright owner, even if it was manufactured and sold overseas. This decision will have a very broad and significant impact on the marketplace, especially for content creators, publishers, software companies, and movie & television companies.
The case (Kirtsaeng v. John Wiley & Sons) involves Supap Kirtsaeng, an entrepreneur who sells college textbooks on eBay, which he purchased in Thailand, for much less than the U.S. retail price. The publisher, John Wiley & Sons, sued Mr. Kirtsaeng for copyright infringement and was awarded $600,000 by a New York court. The decision was later upheld by the 2nd U.S. Circuit Court of Appeals, which ruled that the first sale doctrine did not apply to this case. The Supreme reversed.
Besides individual sellers and buyers of copyrighted products, this ruling will have a great impact on musicians, libraries, and museums, as well as companies such as eBay, Craigslist and many others. Had the Supreme Court upheld the 2nd Circuit ruling, people would not have been able to legally resell copyrighted material from foreign countries without the permission of the copyright holder. Now the highest court in the land has said, “yes they can!” Everyone has an opinion. What is yours?
Until next time, I’m Attorney Francine Ward helping you protect what’s yours.