Supreme Court to Hear Copyright Case on Resale of Works Produced Outside the U.S.

To help pay for school, a mathematics graduate student from Thailand studying in the U.S. asked friends and relatives who lived abroad to buy cheap foreign editions of textbooks and send them to him so he could resell them on eBay. A New York court found that the student had committed copyright infringement and awarded the publisher $75,000 in damages for each book, for a total of $600,000. The Second Circuit upheld the decision. Recently, the Supreme Court agreed to hear the case.

The Supreme Court’s decision is expected to have a significant impact on e-commerce. eBay, along with several large technology trade groups, filed a friend-of-the-court brief, which stated, “The Second Circuit’s rule substantially threatens the increasingly important e-commerce sector of the economy, particularly secondary market e-commerce.”

At issue is whether the first sale doctrine, which allows purchasers of copyrighted works to resell them, applies to works that are produced outside the U.S., but imported into and resold in the U.S. There is a three-way split in how the Circuit Courts have answered this question, with the Second Circuit saying that copyrighted works can never be resold in the U.S. without the permission of the copyright holder, the Ninth Circuit saying that they sometimes can be resold, if the copyright owner authorized a previous sale in the U.S., and the Third Circuit saying that they always can be resold, as long as the copyright holder authorized the original overseas sale.

Two years ago, the Supreme Court reviewed the Ninth Circuit’s decision, but the Court split 4-4, with Justice Kagan not voting. She will be participating in this case, though, which will be heard in the fall.

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Categories: General Business Compliance
Tags: Intellectual Property, Trademarks, Patents, Copyright