This article originally appeared in the 3.21.13 issue of Metroland
to report that the Supreme Court got something right. Some months ago we talked here about a case
before the Court involving a Thai student who bought inexpensive English
textbooks in Thailand and sold them in the United States for sixable profits. The publisher of the textbooks, Wiley, sued,
saying that this was somehow illegal. At
the center of this is a fundamental principle of copyright law (and of personal
property law in general) called the “first sale doctrine” which stands for the
rather unremarkable idea that once you buy something, it’s yours and you can do
whatever you want with it, including giving or selling it to somebody
else. Wiley claimed that this principle
didn’t apply for some reason to copies of copyrighted products purchased
outside of the United States.
insane? Of course it does, but that
didn’t stop a jury from finding the Thai student guilty of infringement and
awarding Wiley damages $75,000 for each title he brought into this
country. And it didn’t stop the Second
Circuit Court of Appeals, the most influential federal appeals court in the
land, from upholding the verdict. And it
didn’t stop the Ninth Circuit Court of Appeals, the second most influential
appeals court in the land, from making a similar finding in a similar case.
Supreme Court restored some sanity this week, with a 6-3 vote reversing the
lower courts and announcing that the first sale doctrine applies to goods that
are purchased outside of the country. Now,
we’re all quite used to (and sick of) years of Supreme Court decisions by what
appears to be a totally dysfunctional and partisan court, votes that are always
split “along party lines,” right? Well,
lookie. As I’ve often said, IP decisions
never seem to go that way, and this case was no exception: Justice Brewer wrote
the majority decision, joined by Alito, Kagan, Roberts, Sotomayor and Thomas;
Justice Ginsberg wrote the dissent, joined by Kennedy and Scalia. WTF is right!
One can only scratch one’s head.
72-page decision starts out with an exhaustive (and exhausting) but not
terribly convincing statutory analysis and discussion of the legislative
history supporting its decision. Then it
starts flinging some basic and practical reality: libraries are full of books
printed elsewhere; most new books sold in the U.S. are printed off-shore, many
books don’t even say where they’re printed; “automobiles, micro waves, calculators, mobile phones, tablets, and
personal computers” contain copyrightable software programs or packaging” that
originate in foreign countries, retailers of all types import mountains of
copyrightable stuff overseas that’s already been sold once; how about museums
wanting to display works created overseas that still have copyright protection?
All these things would present huge
issues and uncertainties if the first sale doctrine only applied to things
purchased in the U.S.. The best that
Wiley and the various amicus
supporting it (including, shamefully, the Obama administration) could argue was
that the law had never been applied that way, and that these were merely theoretical
problems. You know, the old “trust us, we’d never ever
do that” routine.
The majority, wonderfully, wasn’t
buying this load of tripe, and wasn’t eager to open a Pandora’s box if it
endorsed a copyright holder’s right to extraordinary control over copies of
works manufactured and sold in foreign countries.
Finally, and significantly, the
majority smacked down Wiley’s, Obama’s, and the dissenters’ sniveling argument
that the ruling would disrupt publishers’ long-standing business model of
dividing up foreign markets and charging different prices in different
countries as a way to maximize profits.
You know how we rant here from time to time that corporate America has
hijacked copyright law? How instead of
promoting social good (as dictated in the Constitution), Big Media has mutated
copyright law into a vehicle to prop up its outdated business models? Well here it is in a legal argument before
the Supreme Court—Big Publishing wants copyright law to protect the way it’s
always done business, because to change would... it would... why, it would hurt profits and shareholder value!
In a delightful passage that totally
gooses us copyright geeks and portends more good things to come the Court
the dissent claim that [today’s ruling] will make it difficult, perhaps impossible,
for publishers (and other copyright holders) to divide foreign and domestic
markets. We concede that is so. A publisher may find it more difficult to
charge different prices for the same book in different geographic markets. But
we do not see how these facts help Wiley, for we can find no basic principle of
copyright law that suggests that publishers are especially entitled to such
the Constitution’s language nowhere suggests
that [copyright’s] limited exclusive right should include a right to divide
markets or a concomitant right to charge different purchasers different prices
for the same book, say to increase or to maximize gain. Neither, to our
knowledge, did any Founder make any such suggestion.
Expect a Big Media mad rush to
Congress to “fix” this ruling. Here’s
hoping the Obama administration has learned a lesson here and starts to watch
out for us, not them, for a change.
Paul Rapp is an intellectual property
attorney from the Berkshires who, unlike you, wouldn’t mind if winter lasted