Copyfight or Copyright?- An analysis on the legal scenario of parallel importation

On 19 March, 2013, in a closely divided 6-3 judgment in Kirtsaeng v. John Wiley, the U.S. Supreme Court held that copyright law could not be used to prevent parallel importation into USA for works that are made outside USA.

The facts of the case are as follows:

In 1997, a student named Supap Kirtsaeng, from Thailand arrived at the Cornell University, U.S. to study. He noticed that the textbooks in the U.S. were considerably more expensive than the same textbooks bought abroad. He started his own import business wherein friends and family, from back home, sent him textbooks, which he resold in the U.S. at a profit. On eBay, according to the evidences procured, he made a profit of $ 1.2 million on selling the imported textbooks.

When John Wiley, a well known publisher in U.S. came to know about this venture of Kirtsaeng, he sued him for copyright infringement. His stance was clear- consumers would prefer low-cost books from Thailand over the expensive textbooks he sold. He made sales through the products manufactured abroad but the re-sale of his paid products was not acceptable to him.

Kirtsaeng referred to the first-sales doctrine, mentioned in the U.S. copyright laws which enables residents of the U.S. to resell legally obtained objects without asking for the copyright owner’s permission. This is enshrined in Section 109 of the U.S. Copyright Act which states: “The owner of a particular copy or phone record lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy of phone record.”  This is called as a ‘right of first sale’. In simpler terms, if you are the copyright holder, you get to control only the first sale of your copyrighted article. If there is legitimate re-sale after the first sale, there is no legal recourse that can be taken.

The High Court held that purchasers have the right to re-sell and distribute that copyrighted article without the consent of the copyright holder, and unauthorized parties can import the same into the U.S., regardless to the fact whether the copy was manufactured in U.S. or abroad. This wide interpretation of Section 109 of the U.S. Copyright Act served as a limitation to Section 602(a)(1) of the same Act which mainly deterred gray market importing. Section 602(a)(1) states: “Importation into the United States, without the authority of the owner of copyright of copies of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies [of the work].”

With reference to this, Section 17 of the same Act states that the owner of copies ‘lawfully made under this title’ may sell or distribute their legally acquired copies without the copyright holder’s permission.

The main question raised in this case was whether the phrase ‘lawfully made under this title’ meant lawfully made in the United States’.

Opinion of the Majority

The Majority Bench, with 6-3, reversed the Second Circuit’s decision holding that the first sale doctrine did not apply to foreign-made goods. They emphasized that the first sale does apply to works made abroad if they have been imported by or with the permission of the copyright-holder.

Further, the key phrase which was under fire, did not have any geographical implication but should be interpreted on the provision per se. Further, they stated that copyright infringement under Section 109(a) would essentially refer to libraries circulating books printer abroad without the copyright holder’s consent, book stores to sell such books, for consumers to sell their used foreign-made cars containing automobile software, for consumers or others to re-sell other foreign-made goods that come in copyrighted packaging, for museums to publicly display foreign works without consent.

Coming again to the key phrase ‘lawfully made in accordance with the title’ purely meant ‘made in accordance with the Copyright Act’. So, interpreting Section 109(a)- ‘first sale doctrine’ would apply to copyrighted work as long as their manufacture met the requirements of U.S. copyright law. Again, essentially, focus was on whether the copies were manufactured abroad with the permission of the copyright-holder.

Interestingly, with this decision, copyright law and trademark law both now stand at the same juncture with respect to the goods which are paid for by the original copyright owner. In simpler terms, copyright & trademark law cannot keep a check on the legitimately made copies for which the copyright holder has been paid and keeping a track on the first sale made.

About the Author: Ms. Madhuri Iyer, Trade Mark Attorney at Khurana & Khurana and can be reached at: Madhuri@khuranaandkhurana.com

Follow us on Twitter: @KnKIPLaw .

Leave a Reply

Categories

Archives

  • November 2024
  • October 2024
  • September 2024
  • August 2024
  • July 2024
  • June 2024
  • May 2024
  • April 2024
  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • October 2023
  • September 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • February 2011
  • January 2011
  • December 2010
  • September 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010