Any day now, the Supreme Court will make a ruling on Kirtsaeng v. John Wiley & Sons, Inc. It is an important case for libraries, which could determine the future of the first sale doctrine, but most librarians probably know nothing about it. This is why I am writing this post, and deliberately choosing to discuss it in simple terms to put the main issues we should be concerned about in clear terms. Those who want greater detail have many other places to look.
Briefly, in Kirtsaeng, a graduate student enrolled at a university in the United States purchased textbooks in his home country of Thailand where the books were sold at a lower price than in the United States. (This is not unusual. Rights holders–those that hold the exclusive rights of copyright–will set different prices for works depending on the geographic region. There is a noticeable difference when comparing the sales price in a rich nation to a developing nation. Rights holders understand that the people in a developing country would be unable to afford the U.S. purchase price, so they lower it. Often times the lower priced books are of a lesser quality than the higher priced books.) Kirtsaeng then sold those copies to other college students at a higher price than in Thailand, but still lower than in the United States. He made a tidy profit.
One of the textbook publishers – Wiley and Sons – sued the student for copyright infringement. Wiley argues that the student did not lawfully acquire the books therefore; he had no first sale right. Much of their case rests on language in the copyright law “lawfully made under this title.” Wiley is focusing on the word “made.” Wiley argues that there is no first sale for books manufactured overseas, even if you legitimately acquired and purchased the books.
DemandProgress, which also takes issue with Wiley and Sons position, made a great animated short that explains the case as well.
Why libraries are concerned
Libraries purchase books that are often made in other countries. A publisher may choose to have the printing process done in another country to save costs. If you follow the logic of Wiley’s argument, this means that libraries would be unable to lend any books they purchased that were produced in another country. Therefore, no first sale for books and other copyright-protected resources manufactured overseas.
The issue being debated is first sale (§109) of the copyright law. This is the provision that allows libraries (and other people) to lend books, sell books, share books, and dispose of books. It is an exception to the exclusive right of distribution. It works this way: Rights holders have the exclusive right to distribute their creative works to the public. This is a key way that a rights holder can make money — through the sale of copyrighted works made available to the public. But once a person (or library) obtains a copy of the work (usually by buying it) that person can distribute that copy to others. People say that once a rights holder makes a sale of a copy, he has “exhausted” his distribution right regarding that particular copy. The first sale exception is extremely important public policy because it advances the dissemination of information to the public, the very purpose of the copyright law.
As a practical manner, Wiley’s position is ridiculous. Libraries buy books that are sold in the United States but are printed in another country. Libraries buy books from foreign publishers published and made in other countries as well, bring them back to the U.S and add them to the library collection. Under Wiley’s theory, one would have to pay acute attention to where books and other resources are made, and sometimes this information is not readily available. A good part of a library’s existing library collection could not leave the premises of the library building through lending. This also would confound businesses that make money in secondary markets. Amazon would not be able to sell used books and even other second hand materials (that have copyright protection) unless they were manufactured in the United States. Other examples advance to the extremes. If you bought a car that includes computer software manufactured in another country, you would never be able to sell it or even give it to your daughter as a graduation gift. It could be illegal to have a garage sale if anything you are selling (with copyright protection) was made outside of the United States. And what about companies like eBay that provide a venue for the sale of used goods? What about Goodwill?
The American Library Association is a founding member of a group called Owner’s Rights Initiative (ORI) to make Congress aware of the importance of first sale. Their motto –“you bought it, you own it.” The Library Copyright Alliance (LCA) of which ALA is a member, filed an amicus brief (pdf), arguing that a ruling in favor of Wiley would be a significant blow to libraries. Our argument and others focuses on varying interpretations of what “lawfully made under this title” means, but also discusses the obvious — a ruling in favor of Wiley would be bad public policy. As you can see, the stakes are high.
Could the Supreme Court actually rule in favor of Wiley? It is possible. There is another part of the copyright law (§ 602) regarding the importation of foreign works without the authorization of the rights holder, and it muddies the waters further because it seems to conflict with first sale. The majority of the people I have talked to believe that the Supreme Court will come to the conclusion that a “middle ground” decision must be formulated, but really we don’t have a clue.
The Court is scheduled to announce court decisions after March 18th so any day now, we will learn the fate of library lending.
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