Wednesday, November 21, 2012

Supreme Court's copyright ownership case

The expanse & involvement of this case alone is interesting.

The morning of Oct. 29th., Lisa Shuchman at Corporate Counsel wrote, "while most federal government offices and businesses were closed in anticipation of the arrival of Hurricane Sandy, it was business as usual at the U.S. Supreme Court, which was hearing arguments in Kirtsaeng v. Wiley, a copyright case that could change a long-standing, fundamental view of property ownership in the United States.

"But, even after oral arguments had been heard, it was impossible to predict how the justices might rule in the high-stakes case, with lawyers on both sides saying some issues would likely remain unresolved no matter what -- So a diverse coalition which includes library associations, museums, bookstores, and online retailers established the Owners' Rights Initiative (ORI) -- a group created to educate members of Congress about how changes to copyright law might affect them."

Shuchman further relates "the case, considered one of the most important intellectual property matters to come before the high court, concerns the 'first sale' doctrine in copyright law -- a concept that leaves owners free to resell, lend, or give away copyrighted items without permission from the copyright holder --- a doctrine long interpreted as one that applies to all goods, regardless of where they originated. But book publishers, software companies, and the movie and music industries, looking to protect their practice of setting different prices for different markets, argue that the doctrine should apply only to goods produced in the U.S."

The case stems from textbook publisher John Wiley & Sons pitted against Supap Kirtsaeng, a student who came from Thailand to study at Cornell and later the University of Southern California. Discovering that textbooks almost identical to those in the U.S. were considerably less expensive in Asia, he had friends and family members send multiple copies of needed books to him, which he then resold to students in the U.S. at a profit. Wiley sued Kirtsaeng for infringing its copyrights; the Court of Appeals for the Second Circuit ruled in Wiley's favor. ( Here )

Brandon Butler and Jonathan Band in their article at and in the Library Journal, noted that "since 1978, the law has protected publishers who sell products at different prices abroad than they do in the US by barring the unauthorized importation of copies purchased abroad (with exceptions for ordinary people bringing home books and the such in their luggage, and, importantly, for libraries importing works for their collections). This importation right is part of a broader distribution right, which allows the copyright owner to control the distribution of copies to the public by sale or lease. Wiley invoked this law in its suit against Kirtsaeng.

"In his defense, Kirtsaeng invoked the principle of what copyright law calls the 'first sale doctrine,' but what normal people might call owner's rights: a lawful owner of a lawful copy of a copyrighted work can generally do whatever he/she wants with that copy--resell, lend, donate, or even destroy it--without permission from the copyright holder. To put it another way, the author's right to control a particular copy of her work ends after the first sale. Otherwise, copyright would be inconsistent with all the ordinary expectations of owners. The first sale doctrine is especially important to libraries, whose primary activity throughout history has been to buy copies of works and make them available to their communities by lending."

Butler and Band continued in their article by writing "Wiley argues that this principle cannot apply to copies printed outside the U.S., or else they could not block grey market books from U.S. markets. Because first sale protects all distributions (including domestic resale and lending), not just importation, Wiley's argument could radically change the way foreign-made copies are treated by U.S. law. Nevertheless, so far the courts have agreed with Wiley. Even the U.S. government has filed a brief siding with the publisher. Wiley argues that copyright law should protect U.S. companies from having to compete with their own foreign editions, even if this means owners' rights in the U.S. have to be sacrificed."

ScotusBlog's Ronald Mann, in his recap of oral arguments on Oct. 31st., characterized the case as "the latest chapter in a seemingly intractable problem of copyright law: whether a U.S. copyright holder can prevent the importation of 'gray-market' products manufactured for overseas markets. When the Court tried to address this question two terms ago -- in Costco Wholesale Corp. v. Omega, S.A. -- the Court was equally divided (with Justice Kagan recused).

He, too, was reluctant to predict an outcome, writing "It's obviously risky to predict results in cases this close based on oral argument. Clearly the Justices will be mulling the case carefully before the opinions ultimately are released. But one thing is certainly clear: the publishers did not win over any new votes with the argument today, and the government's concession that it could not accept the publisher's position well might have sealed their defeat."

ScotusBlog's case docket

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