The US Supreme Court has confirmed in Kirtsaeng v John Wiley & Sons, Inc 568 US (2013) that the first sale doctrine applies to copies of a copyright protected work lawfully made abroad. By doing so,
The US Supreme Court has confirmed in Kirtsaeng v John Wiley & Sons, Inc 568 US (2013) that the first sale doctrine applies to copies of a copyright protected work lawfully made abroad. By doing so, it has embraced a regime of international exhaustion for physical copyright works and legitimised grey market goods.
Supreme Court Decision
In the US, a copyright owner has the exclusive right to distribute and prohibit importation of copies of a copyrighted work. However, these rights are qualified by the "First Sale Doctrine", which provides that the "the owner of a copy lawfully made …. is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy".
The Supreme Court did not think that there was a geographical limitation in the legislation to restrict the First Sale doctrine to works lawfully made in the US. A geographical limitation would mean that libraries that often hold foreign printed books would need to locate and obtain permission from the copyright owner before re-circulating these foreign editions.
Comment
This decision presents problems for copyright owners who attempt to price physical products differently in different markets. There is now an incentive to customise products to a particular market or to draft terms and conditions as mere rights of use rather than transfers of ownership.
The Supreme Court has since confirmed that the Kirtsaeng decision is restricted to copyright works. In patents cases the “first sale” is restricted to sales made inside the US.
There is now a clear difference in the US legal treatment of physical and digital copies of copyright works. In the recent Capitol Records v ReDigi case, the US District Court in New York specifically affirmed that the First Sale Doctrine applies only to physical assets, not digital assets such as downloaded digital content. Please see article on the constrasting approaches in the US and EU to the re-sale of digital assets.
Supreme Court Decision
In the US, a copyright owner has the exclusive right to distribute and prohibit importation of copies of a copyrighted work. However, these rights are qualified by the "First Sale Doctrine", which provides that the "the owner of a copy lawfully made …. is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy".
The Supreme Court did not think that there was a geographical limitation in the legislation to restrict the First Sale doctrine to works lawfully made in the US. A geographical limitation would mean that libraries that often hold foreign printed books would need to locate and obtain permission from the copyright owner before re-circulating these foreign editions.
Comment
This decision presents problems for copyright owners who attempt to price physical products differently in different markets. There is now an incentive to customise products to a particular market or to draft terms and conditions as mere rights of use rather than transfers of ownership.
The Supreme Court has since confirmed that the Kirtsaeng decision is restricted to copyright works. In patents cases the “first sale” is restricted to sales made inside the US.
There is now a clear difference in the US legal treatment of physical and digital copies of copyright works. In the recent Capitol Records v ReDigi case, the US District Court in New York specifically affirmed that the First Sale Doctrine applies only to physical assets, not digital assets such as downloaded digital content. Please see article on the constrasting approaches in the US and EU to the re-sale of digital assets.