If you have plans to sell a DVD player or just about any other product that was manufactured and purchased abroad, you may have to think again. The U.S. Supreme Court case Kirtsaeng v. John Wiley & Son might determine that such a sale is a copyright infringement punishable by tens of thousands of dollars.
Late last month, the Supreme Court heard the issue of whether U.S. copyright protection extends to products that are manufactured and purchased abroad, and then resold in the U.S. without the permission of the manufacturer. The appellant, Supap Kirtsaeng, was a graduate student from Thailand who noticed that international editions of textbooks were cheaper and virtually the same as American editions. Realizing a business opportunity, he asked his relatives to purchase textbooks in Thailand and send them to him. He sold $900,000 worth of textbooks on sites such as eBay. In 2008, publisher John Wiley & Sons brought suit against Kirtsaeng, and won $600,000 in damages for the unauthorized sale of eight books. Kirtsaeng appealed the decision to the 2nd U.S. Circuit Court of Appeals, which affirmed the decision.
The Supreme Court took up the case and heard arguments on October 29. The issue turns on the Court’s interpretation of the “first-sale doctrine.” Under this doctrine, the original purchaser of a copyrighted work that was “lawfully made under” U.S. copyright law can “sell or otherwise dispose of” it without getting permission from the holder of the copyright. Thus, if you purchased a U.S.-manufactured iPad, you can do whatever you want with it, whether it’s selling it on Craigslist or donating it to a charity auction.
The question now is whether the first-sale doctrine applies when the good was manufactured abroad. Here, the problem for sellers is that there exists another provision of copyright law that prohibits the importation into the United States, “without the authority of the owner of copyright,” of copies of a work “acquired outside the United States.” The Supreme Court could hold that this provision prevails over the first-sale doctrine. If so, anytime you sell a product that was manufactured abroad, you could be exposing yourself to a copyright infringement lawsuit.
The consequences of this case are far-reaching. Almost every product made has a copyright logo on it, so you would have to be careful about selling anything manufactured abroad. Heavy-hitters, such as Costco and eBay, are paying close attention, but this case affects entrepreneurs and small businesses as well.
Check back in June when the Supreme Court issues its opinion on this case.