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Justices Weigh Copyright Issues in Textbook Case

The U.S. Supreme Court on Monday took up a copyright case with potential implications for educational publishers, librarians, teachers, and students.

The court convened for the arguments in Kirtsaeng v. John Wiley & Sons Inc. (Case No. 11-697) and one other argument even though the rest of the federal government shut down in the nation's capital because of the approach of Hurricane Sandy.

The case involves an enterprising college student who helped finance his studies by selling overseas editions of popular college textbooks, which are priced much cheaper than their counterpart U.S. editions. Supap Kirtsaeng emigrated from Thailand in 1997, soon after he had graduated from high school. He attended Cornell University and later entered a graduate program in mathematics at the University of Southern California.

During his studies, Kirtsaeng's family back in Thailand would send him copies of popular college textbooks in such subjects as accounting, engineering, and organic chemistry. The overseas versions were largely the same in content as more expensive U.S. editions, though they often printed on cheaper paper stock, had fewer photos and graphics, and lacked add-ons like CD-ROMs. But the foreign editions usually had warnings, such as "This book is authorized for sale in Thailand only and may not be resold."

Kirtsaeng sold the foreign editions in the United States on eBay, with total sales of at least $900,000 in about a year, at a profit of some $100,000, court papers say.

Educational publishers such as John Wiley & Sons, based in Hoboken, N.J., contend that provisions of the federal Copyright Act of 1976 bar the importation and distribution of such foreign versions of their books. Wiley sued Kirtsaeng for copyright infringement, and a jury found him liable for such infringement regarding eight college texts. The jury imposed damages of $600,000 on Kirtsaeng.

The student appealed, arguing that he was protected by the "first-sale doctrine" under copyright law, which means that once a publisher is paid for a particular item, the buyer owns that copy and may redistribute it. A panel of the U.S. Court of Appeals for the 2nd Circuit ruled 2-1 against Kirtsaeng last year, holding that the first-sale doctrine does not apply to copies manufactured outside the United States.

The court said a provision of the 1976 Copyright Act "obviously intended to allow copyright holders some flexibility to divide or treat differently the international and domestic markets for the particular copyrighted item."

In their Supreme Court brief, lawyers for Kirtsaeng point out that over the past two decades, the prices of college textbooks have tripled, "soaring at twice the rate of inflation."

"Textbook publishers have long exploited their captive customers," the student's brief says. Kirtsaeng was engaged in "unremarkable efforts to meet the needs of fellow students for an alternative market for lawfully purchased, lower-priced textbooks," the brief adds.

In the Supreme Court today, E. Joshua Rosenkranz, Kirtsaeng's lawyer, referred to one of the problems that the student and his allies contend could result from a ruling for the publisher.

Rosenkranz cited Section 110 of the 1976 Copyright Act, which exempts from liability a teacher's use of a copyrighted work "in the course of face-to-face teaching activities ... in the classroom."

"A teacher can go and buy a Beethoven record and play it to her class if it was made in the United States," Rosenkranz told the justices. "But if she [buys a] Beethoven record that happens to have been made in Asia, she can't play that for her class."

Kirtsaeng's allies include eBay, Goodwill, used book stores and others who fear the implications of the court's ruling on the aftermarket for copyrighted and trademarked works and goods. The American Library Association, in a friend-of-the-court brief on the student's side, says that school libraries contain many works still under copyright protections, including many that were manufactured abroad. The library group argues that the publisher's interpretation of copyright law would put a chill on what school and public libraries could lend to students and the public.

Theodore B. Olson, representing John Wiley & Sons in the Supreme Court today, said the student and his allies were advancing a "parade of horribles" that "people have been arguing about for years," but that were highly speculative.

"You are not exhausting your U.S. copyright when you make something, or allow something to be made abroad," Olson said. "But if you interpret [the Copyright Act] as my opponent interprets it, you are opening the door to commercial enterprises precisely like this."

The arguments were fairly technical over the interplay of different provisions of the Copyright Act, and it wasn't easy to read where the justices stood on the question.

Justice Ruth Bader Ginsburg pressed Rosenkranz on whether his view clashed with the 1976 law's provisions allowing publishers to segment markets by country.

"Your reading is, once a copy is sold anywhere, the copyright owner loses distribution everywhere," she said, with some skepticism.

Justice Sonia Sotomayor asked Olson, "Isn't it incumbent on us to give the statute" a "more rational plain meaning" to deal with the "parade of horribles"?

Olson replied, "There is a body of the government of the United States that is entitled and capable of fixing this," evidently referring to Congress and not the Supreme Court.

A decision in the case is expected by next June.

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