Supreme Court to Wiley publishers: your insane theory of copyright is wrong

The US Supreme Court has handed down a verdict in Kirtsaeng v. John Wiley & Sons, one of the most important copyright cases of the century. In it, the publisher John Wiley & Sons sought to block the import of legally purchased cheap overseas editions of its books by arguing that "first sale" (the right to resell copyrighted works) only applies to goods made in the USA. However you feel about cheap overseas editions and their importation into the USA, this was a disastrous legal theory. Practically everything owned by Americans is made outside of the USA and almost all of it embodies some kind of copyright. Under Wiley's theory, you would have no first-sale rights to any of that stuff -- you couldn't sell it, you couldn't even give it away. What's more, the other "exceptions and limitations" to copyright would also not apply, meaning that it would be illegal to photograph anything made outside of the USA (no di minimum exemption) or to transform it in any way (no fair use, either). Thanks goodness the Supremes got this one right!

Here's some choice bits of the decision (PDF)

These intolerable consequences (along with the absurd result that the copyright owner can exercise downstream control even when it authorized the import or first sale) have understandably led the Ninth Circuit, the Solicitor General as amicus, and the dissent to adopt textual readings of the statute that attempt to mitigate these harms. Brief for United States 27–28; post, at 24–28. But those readings are not defensible, for they require too many unprecedented jumps over linguis tic and other hurdles that in our view are insurmountable. See, e.g., post, at 26 (acknowledging that its reading of §106(3) “significantly curtails the independent effect of §109(a)”).

...In reaching this conclusion we endorsed Bobbs-Merrill and its statement that the copyright laws were not “in tended to create a right which would permit the holder of the copyright to fasten, by notice in a book . . . a restriction upon the subsequent alienation of the subject-matter of copyright after the owner had parted with the title to one who had acquired full dominion over it.” 210 U. S., at 349–350.

And here's a serious smackdown of the "if I can make money doing it, copyright should protect it" theory of law:

Third, Wiley and the dissent claim that a nongeographical interpretation 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 rights.

Supreme Court Upholds First Sale Doctrine


Update: a great comment from Shrikant, below:

It would appear that the Supreme Court has essentially just paraphrased Robert Heinlein from Life-Line:

"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back."

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  1. Cory

    Given that Wiley won a jury verdict against Kirtsaeng, that was upheld by the US Court of Appeals for the 2nd Circuit, in what sense was it an “insane theory”?

    Wrong yes, but insane?

    As someone might have once said: don’t let the facts get in the way of a good headline.

    1. “Jury Trial” in the US is not a measure of sanity. Juries are instructed to deliberate the facts and the law, and arguing or effecting jury nullification of an insane law is grounds for overturning the jury’s decision; Judges have done so simply because they didn’t understand how a jury could come to a particular decision therefore it must be jury nullification. Juries don’t get to overturn or ignore insane law or insane legal theory.

      1. I’ve come across nothing in my reading that says that in a U.S. jury trial where the jury has nullified, the judge can trump the jury. In fact, quite the opposite: “Once a jury returns a verdict of “Not Guilty,” that verdict cannot be questioned by any court and the “double jeopardy” clause of the Constitution prohibits a retrial on the same charge.”

        Do you know of any cases where, as you say, “Judges have done so”?

      2.  That particular jury was just jealous that this enterprising college student made himself a millionaire due to Wiley’s greed backfiring on them and their continuing ripping off the American consumer.

        When did manufacturing overseas come to mean discounting products for those countries and raising prices over here to pay for it?

    2. How is “insane” not fitting? The argument is that you don’t have the right to sell or give away 80% of the things you buy because they happen to be made somewhere other than the US. It flies in the face of common sense, logic and every definition of reasonable you care to come up with. I think “insane” fits perfectly.

    3. You really think winning a verdict proves that something is perfectly rational? And even if you do think that, it’s not a “fact”.

    4. I’m pretty sure he’s arguing that the notion that first-sale only applies too goods made in the USA is the insane aspect of the argument. At the very least it doesn’t correspond to the real world — a pretty good definition of delusional.

    5. Those executed during the Salem Witch Trials were convicted by juries. The witchcraft theory was still pretty insane, though.

  2. From the dissenting opinion:

    “The absence of such lawsuits [the owner of a consumer good authorized for sale in the United States being sued for copyright infringement after reselling the item or giving it away] is unsurprising. Routinely suing one’s customers is hardly a best business practice.”

    Yeah, well tell that to the farking RIAA and MPAA mafias.

    1.  The problem in this case is the “captive market” for textbooks, which lets the publishers charge exorbitantly since they’re required for the students’ coursework.

      The media cartels consider themselves in the same position, as gatekeepers for entertainment, and lead to nonsense like the Jammie Thomas verdict upheld today.

    2. It is a quite different concept. In one case you are selling a physical object that can obviously be resold. In the other you are copying a product and distributing it either for profit or not. The intellectual property is protected, allowing the creator to profit from their creation, not others who rip it off.    

  3. So, does this make it *two* positive court decisions for freedom in *one* week?

    I’m flabbergasted. 

    1. If it makes you feel better, it’s offset by the record penalty in favor of the RIAA against an individual downloader handed down yesterday.

  4. It’s not an insane theory.  The earlier courts , and the dissent by Ginsburg / Kennedy / Scalia , are compelling.

    It’s an obnoxious theory.  It’s a greedy theory.  It’s a horrible theory and interpretation, but it is grounded in a handful of laws.

    1. Perhaps this particular application was not insane, but the ramifications of codifying this theory in Supreme Court precedent WOULD result in some very insane/irrational claims as pointed out in Cory’s post.

    2. The dissent and the lower court decision held that it was the clear intent of congress to protect a corporation from competition from its wholly owned subsidiary.

      The statute in question is pretty clear — if I run off ten thousand copies of your book without your permission and try to bring them into the states to sell, you — and the customs service — can stop me.

      It’s insane to suggest that the “clear intent of congress” was to act as though this law made no distinction between books printed by a bootlegger and books printed by someone you yourself assigned the rights to manufacture and sell the books abroad.  The statute itself makes that distinction — “lawfully made under this title.”

      Overturning something as fundamental as  the first sale doctrine on the basis of a tortured, illogical-bordering-on-corrupt interpretation of a statute that has never been read as such in all the time it has existed — is insane, regardless of whether or not the second circuit did it.

  5. Which means we can still get paperback copies of advanced science textbooks for less than the ~$150 they sell for new here.   Textbook publishing is a complete scam, anyway.  they turn out new editions even when there’s no new material, just to hurt the resale market.

    1. …which is why my kids’ high school uses the older editions, just so the kids can buy them on ebay for a fraction of the price!

        1. Charter school. They typically have one set in class, but we have to buy our own copy to have it at home.

          This tightwad policy has made the school founders millionaires.

    2. I teach at a community college and I’m as frustrated by this as any student. I’m not indifferent to the cost of textbooks, but the publishers sure try their best to make me so by sending me free review copies. 

      As nice as it is to not have to pay for that kind of thing myself, I have a hunch that more teachers would opt for cheaper textbooks if they shared the financial burden for the decision.

      [EDIT to add: Which is not to imply that any teachers I know get paid a decent wage.]

  6. It would appear that the Supreme Court has essentially just paraphrased Robert Heinlein from Life-Line:

    “There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back.”

  7. I see a different thing happening in the future. Someone will get books printed in some venue where the royalties are low or non-existent, import and sell them in the US. What was the name of that island where they run online casinos, that the US blocked, and some WIPO-esque treaty adjudication said they could ignore select US copyright etcetera as compensation – ?

  8. “Your insane theory is wrong”

    Except, we’re only one simple congressional bill away from that, since Alito & Kagan wrote in their concurrence that Congress could change the current law to give copyright holders more protection.

    1. We’re always “one congressional bill away” from pretty much ANY insane law. That doesn’t mean that an utterly insane interpretation of current law isn’t utterly insane.

  9. Wonder what would happen should this intersect with the idea of a licenser of IP having the same rights as the owner of a physical copy, ie ebook vs paperback, DVD vs mp4.

    Specifically, I’ve heard of some software who recognize that they make useful things, and while their business model counts on them charging for licenses in rich nations, they had clauses that developing nations could use their stuff for free.  The (now depreciated) creative commons developing nations license reflected that desire.

    If a license is the same as owning a thing, people who gave away their stuff out of charity might get bit by those practically legally pirating it.

    (Not that we’re yet to the point where that might be a problem.)

  10. Scalia sided with big corporations and not people? I for one am shocked. Shocked, I say….

    Scalia is very consistent though. Whenever I hear about a Supreme Court case quite often I can predict which way Scalia voted : I think about what I think is the right thing and then guess Scalia voted the opposite…

    1. He’s consistent in that you know how he’s going to come out, but he’s wildly inconsistent in the routes he takes to get there. The only thing consistent about his reasoning is that he’ll argue whatever he needs to get to the result he decided was preferable ahead of time.

  11. Oddly enough, I see this decision as accelerating the textbook publishers’ push to e-books, where they can apply all the various DMCA lockdowns, etc to maintain their stranglehold on the market.

    1. I was thinking that too. If Wiley et al can manage to “region lock” the physical book like a DVD, then it’d technically be illegal for someone in the US to read a textbook assigned to a non-US region.

      Perhaps they could put a diary lock on the textbook, with a stern warning to anyone outside the intended region that unlocking the book outside of the intended region counts as circumvention of their copy protection scheme.

      1. Non-US textbook in the US? Oh come on. That would mean Americans would have to learn things like metric, and Celsius, and proper date formatting!

  12. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back.

    poke poke Unless of course, you are Disney

    Perhaps people have that idea, simply because the courts have allowed the clock to stop or turn back – for corporations with enough cash.

  13. Yes, it was a crazy theory.  The claim by Wiley wasn’t merely unfortunate idea that importation without the copyright owner’s permission was illegal.  Rather it was their contention that for ANY copyrighted item manufactures outside US borders their was NEVER a “first sale.”  The owner of a copyrighted item manufactured outside the US would NEVER have the right to resell, lend or distribute the work in ANY way even if it the copyright owner had been the one to import it and sell it. 

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