The American Library Association estimates that libraries in the United States contain over 200 million foreign-printed books. Picture via Wired.

Eliciting a huge sigh of relief from libraries, museums, used-car salesmen and wide swaths of eBay and Amazon, the Supreme Court held today that buyers of foreign-made works do not have to seek permission from the copyright holders to import the works into the United States. Under the 6-3 ruling in Kirtsaeng v. John Wiley & Sons, a copyright owner’s exclusive distribution rights to a product is extinguished once it is legally sold–even if the work in question was manufactured abroad and then brought overseas to be sold for a “gray market” profit.

Those who remember being broke students and working extra shifts at the university library, participating in mundane experiments for the Psychology department for a $5 bill, or balking at the price of required textbooks in the bookstore might appreciate the ingenuity of Supap Kirtsaeng. Kirtsaeng, a Thai student who had come to the United States in 1997 to study mathematics and subsequently obtained an undergraduate degree from Cornell and a Ph.D. from USC, had been looking for a way to make some cash while in the U.S. After he noticed that the textbooks he purchased in the United States were more expensive than identical Asian editions that he could buy back home, he asked friends and family to mail copies of the Asian editions to him for resale. Despite the fact that the foreign edition textbooks specifically carried a page stating that such books were not to be exported out of Europe, Asia and the Middle East, Kirtsaeng sold them in the United States, reimbursed his friends and family for the price of the books purchased in Thailand, and kept the difference.

Naturally, John Wiley, the publisher of the textbooks and the owner of Wiley & Sons Asia (the subsidiary that produced the Asian editions), did not appreciate Kirtsaeng’s moneymaking scheme and brought a copyright infringement suit once it caught wind of his business. To do this, however, they had to get around the “first sale” doctrine, an exception written into the Copyright Act which cuts off a manufacturer’s exclusive right to distribute a copyrighted work at the moment that it is originally sold. Once a lawful sale is made, the copyright holder no longer gets a say in where the product can go, and the buyer is free to do what he/she wants to do with it–whether the buyer’s purpose to gift it, put it in a library, donate it to a museum, or resell it to fellow students.

While there is no dispute that this purchaser-friendly first sale doctrine applies to domestically made works, Wiley successfully argued in lower courts that the language of the exception, as codified under Section 109(a) of the Copyright Act, only applies to works that are “lawfully made under this title.” In Wiley’s interpretation, the phrase “lawfully made under this title” limits the first sale exception to only works that are produced in territories subject to the Copyright Act (the United States), and not works that are made overseas, where the Copyright Act has no force. Under such a reading, then, Kirtsaeng needed Wiley’s permission to import the Asian textbooks into the United States and sell them there. Since he had not done so, the trial court found that he had infringed Wiley’s copyright and awarded Wiley damages of $75,000 per work, totaling $600,000 in all. The Second Circuit affirmed this ruling.

Today, however, the Supreme Court rejected that argument by a 6-3 vote, ruling that the “first sale” doctrine has no geographical limitation and does in fact apply to works manufactured abroad. Justice Stephen Breyer, writing for a majority that included Chief Justice Roberts and Justices Sotomayor, Alito, Kagan and Thomas, pointed out that Wiley’s interpretation of “lawfully made under this title” would affect many sections of the Copyright Act, leading to a parade of nonsensical and nearly-unenforceable horribles. For example, this reading would give copyright owners the power not only to control the resale but also the display of foreign-made works–the result being that tourists would not be able to attach to their cars bumper stickers bought on vacation, arcades would not be able to install video games manufactured overseas, and teachers would not be able to show their students documentaries made abroad without first obtaining permission from the copyright holder.

Breyer’s opinion snowballs on: havoc would be wreaked on museums and libraries across the country, which collectively host millions of foreign-made works. Technology companies that create products made of multiple copyrightable foreign-manufactured components would be affected. The used-car market–a good portion of which involves cars made abroad–and the $2.3 trillion imported goods market would be impacted. Looking to the text and the history of the Copyright Act and “considerations of simplicity and coherence,” Breyer concluded that Congress could not have intended such restrictive consequences. Thus, the first sale doctrine barred John Wiley from exercising distribution rights over the Asian-edition textbooks that were lawfully sold to Kirtsaeng’s family and friends.

Justice Ruth Bader Ginsburg’s dissent, which was joined by Justice Kennedy in full and Justice Scalia in part, argued that the Court’s ruling “shrinks to insignificance” copyright protections against gray market unauthorized imports and hurts the U.S.’ trade interests in the long run. Characterizing Breyer’s parade of horribles as “imaginary” and “absurd,” the dissent dismissed the majority’s fear of a flood of litigation against museums and libraries and used-car salesmen, pointing out that the Copyright Act already has other exemptions that would allow for the importation, without copyright holders’ permission, of products for certain governmental, academic, educational and personal uses.

From a practical standpoint, however, it isn’t difficult to see why Breyer, and not Ginsburg, was able to line up five Justices behind his position. In the end, there are just too many things in this country that would have been swept up under Wiley & Sons’ proposed rule, and the deep fear of an ensuing legal avalanche won the day for Supap Kirtsaeng. Few things are made in the USA anymore, and foreign trade is increasingly important to the national economy. Giving publishers and manufacturers such immense and potentially perpetual power over legally sold products would have up-ended, as Breyer said, “ordinary scholarly, artistic, commercial and consumer activity,” and it is too late for Wiley to go back and change the rules that everyone has been playing by for decades. Some genies, as it turns out, cannot be put back into their Made In China bottles.