Top court says individuals can resell their textbooks for profit without copyright infringement

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When Supap Kirtsaeng moved to the U.S. in 1997 to study math at Cornell University, the citizen of Thailand realized that he could get textbooks cheaper back home.

He asked friends and family to buy low-priced copies of foreign edition English language textbooks and mail them to him in the U.S. He then sold the books here, paid back the senders and kept the profit.

That entrepreneurial spirit got him into trouble when the publisher, John Wiley & Sons Inc., sued for copyright infringement, saying he imported and then sold the books without authorization.

The case went all the way to the U.S. Supreme Court, where the high court ruled 6-3 that Mr. Kirtsaeng's international business was not a problem. The publishing industry wasn't happy, but the American Library Association cheered, calling it vindication of the principle of "first sale doctrine -- if you bought it, you own it."

That's certainly what all those people on Craigslist believe when they sell their old college texts or their copies of "Chicken Soup For the Soul" for $5.

But figuring out who can control merchandise or music or other materials has been an ongoing challenge. From battles over sharing music online to the fight to control prices on manufactured goods sold at different stores around the country, there are clearly gray areas.

And an increasingly global economy connected by the aptly named World Wide Web exacerbates the clash of legal concepts, as in the case of Mr. Kirtsaeng.

There are many regions in the world where merchandise will be sold at a lower price point, because that's appropriate for those markets, noted Brad R. Newberg, an intellectual properties attorney with Reed Smith's office in Falls Church, Va.

In the case of John Wiley & Sons, the publisher contracts with authors for foreign and domestic copyright assignments and licenses, according to the majority opinion written by Justice Stephen Breyer.

The publisher often gives its foreign subsidiary in Asia the right to publish and sell English language textbooks abroad. Such books might be printed with a statement such as, "This book is authorized for sale in Europe, Asia, Africa, and the Middle East only and may be not exported out of these territories."

But international borders aren't as solid as in the past. "The fact that it's so much easier now to buy things abroad and bring them back," Mr. Newberg said, makes it harder for companies like John Wiley to keep the markets separate.

Justice Breyer said retailers reported that more than $2.3 trillion worth of foreign goods -- including many with copyrighted packaging, logos and labels -- were imported in 2011, many by retailers who bought them abroad and then sold the items in the U.S. Sales of more traditional copyrighted works such as books, music and movies probably exceeded $220 billion.

"A geographical interpretation would subject many, if not all, of them to the disruptive impact of the threat of infringement suits," Justice Breyer wrote.

These days anyone with a computer and Internet access can order goods from abroad pretty easily, which could make it valuable to do so for resale if shipping costs are low enough, Mr. Newberg said.

He said companies trying to enforce their standards typically don't go after offenders until they hit a certain threshold. "This is not the type of decision that really affects the person selling something he bought five years later on eBay," Mr. Newberg said.

Adele Meyer, executive director of the Association of Resale Professionals, a St. Clair Shores, Mich.-based group that represents resale and thrift shops, welcomed the ruling. "We are happy with the Supreme Court's decision in Wiley," she said, although she felt the impact on her members would be limited because they don't handle a lot of traditional copyrighted material.

Others were not so pleased. After the ruling in March, the Association of American Publishers warned, "The decision will have significant ramifications for Americans who produce the books, music, movies and other content consumed avidly around the world."

The group said the ruling would discourage the export of U.S. copyrighted works and limit the access that educators and students in foreign countries have to U.S.-produced educational materials.

That might not be the end of the debate. The association said it expects Congress will consider whether legislative steps need to be taken to help publishers as they work in global markets.

Mr. Newberg speculated one option might be setting up sales of books as "licenses." He compared it to buying software, where customers generally find themselves clicking on something that says they agree to abide by the license agreement.

"You have actually not purchased a copy of this software," he said. "You have purchased a license."

legalnews

Teresa F. Lindeman: tlindeman@post-gazette.com or at 412-263-2018.


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