This decision is of significant relevance to India, as a government committee headed by Prof Chadha of the NCAER is now considering whether or not to import international exhaustion principles into Indian copyright law.
Respondent, John Wiley & Sons, Inc., an academic textbook publisher, often assigns to its wholly owned foreign subsidiary (Wiley Asia) rights to publish, print, and sell foreign editions of Wiley’s English language textbooks abroad. Wiley Asia’s books state that they are not to be taken (without permission) into the United States. When petitioner Kirtsaeng moved from Thailand to the United States to study mathematics, he asked friends and family to buy foreign edition English-language textbooks in Thai book shops, where they sold at low prices, and to mail them to him in the United States.
He then sold the books, reimbursed his family and friends, and kept the profit. Wiley filed suit, claiming that Kirtsaeng’s unauthorized importation and resale of its books was an infringement of Wiley’s exclusive right to distribute and §602’s import prohibition. Kirtsaeng replied that because his books were “lawfully made” and acquired legitimately, §109(a)’s “first sale” doctrine permitted importation and resale without Wiley’s further permission.
The District Court held that Kirtsaeng could not assert this defense because the doctrine does not apply to goods manufactured abroad. The Second Circuit affirmed, concluding that §109(a)’s “lawfully made under this title” language indicated that the “first sale” doctrine does not apply to copies of American copyrighted works manufactured abroad.
The “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad.In our view, §109(a)’s language, its context, and the common-law history of the “first sale” doctrine, taken together, favor a non-geographical interpretation. We also doubt that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly,artistic, commercial, and consumer activities. We consequently conclude that Kirtsaeng’s non geographical reading is the better reading of the Act.
Common Law Heritage:
The “first sale” doctrine is a common-law doctrine with an impeccable historic pedigree. In the early 17th century, Lord Coke explained the common law’s refusal to permit restraints on the alienation of chattels……
A law that permits a copyright holder to control the resale or other disposition of a chattel once sold is similarly “against Trade and Traffic”.
With these last few words, Coke emphasizes the importance of leaving buyers of goods free to compete with each other when reselling or otherwise disposing of those goods. American law too has generally thought that competition, including freedom to resell, can work to the advantage of the consumer.
Associations of libraries, used-book dealers, technology companies, consumer-goods retailers, and museums point to various ways in which a geographical interpretation would fail to further basic constitutional copyright objectives, in particular “promot[ing] the Progress of Science and useful Arts.”
How, the American Library Association asks, are the libraries to obtain permission to distribute these millions of books? How can they find, say, the copyright owner of a foreign book, perhaps written decades ago?
Used-book dealers tell us that, from the time when Benjamin Franklin and Thomas Jefferson built commercial and personal libraries of foreign books, American readers have bought used books published and printed abroad. The dealers say that they have “operat[ed] . . . for centuries” under the assumption that the “first sale” doctrine applies.
Technology companies tell us that “automobiles, microwaves, calculators, mobile phones, tablets, and personal computers” contain copyrightable software programs or packaging. Many of these items are made abroad with the American copyright holder’s permission and then sold and imported (with that permission) to the United States.
A geographical interpretation would prevent the resale of, say, a car, without the permission of the holder of each copyright on each piece of copyrighted automobile software. Yet there is no reason to believe that foreign auto manufacturers regularly obtain this kind of permission from their software component suppliers, and Wiley did not indicate to the contrary when asked. Without that permission a foreign car owner could not sell his or her used car.
These examples, and others previously mentioned, help explain why Lord Coke considered the “first sale” doctrine necessary to protect “Trade and Traffi[c], and bargaining and contracting,” and they help explain why American copyright law has long applied that doctrine. Neither Wiley nor any of its many amici deny that a geographical interpretation could bring about these “horribles”—at least in principle
And this is my favourite part:
…Wiley claim(s) that a non-geographical 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.
Role of Amicus Briefs:
What is particularly striking about this case (and many others in the US) is the courts’ reliance on amicus curiae briefs filed by a wide variety of experts and associations; library associations, used book groups, technology companies, academics etc. We need to encourage this culture in India, so that courts are exposed to a wide variety of arguments and not necessarily restricted to only those advanced by contesting parties. While there is no right to submit an amicus curiae brief in India, one could take a shot through an intervention petition, as I did in the Novartis case. Hopefully, with more interventions in future, we might effectuate a de-facto amicus curiae culture in India.
1 thought on “US Supreme Court Supports Parallel Imports: Lessons for India”
De facto Amicus Curiae brief! That makes absolute sense but intervention petition needs to be ‘YES’ executed. Parallel imports may be somewhat detrimental to copyright infringement that comes along with the copyrighted works also being contained in the questioned e-waste gizmos. It seems in name of favoring the consumer we as a country have brought a lot of things under the exhaustion umbrella.