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Justices Rule Against Publishers in Textbook Copyright Case

The U.S. Supreme Court on Tuesday issued a decision on copyright law that dealt a defeat to educational publishers but eased the fears of teachers and libraries over the use of books published overseas.

The justices ruled 6-3 that the important "first-sale" doctrine, which holds that the purchaser of a copyrighted item may redistribute it, applies to copyrighted works that are lawfully published outside the United States.

The decision was a victory for Supap Kirtsaeng, a native of Thailand who was a U.S. college student when his relatives back home sent him cheaper, foreign-published versions of major college textbooks. Kirtsaeng sold more than $900,000 of such foreign editions on eBay in the United States, pocketing some $100,000 in profits.

Educational publishers often produce overseas editions of such textbooks that sell more cheaply in foreign markets and are marked for sale in those markets only. John Wiley & Sons Inc., the Hoboken, N.J.-based educational publisher, sued Kirtsaeng for infringement under the federal Copyright Act of 1976. Kirtsaeng was found liable for infringement over college texts, and a jury awarded the publisher damages of $600,000.

The U.S. Court of Appeals for the 2nd Circuit, in New York City, held that the first-sale doctrine did not apply to copies published outside the United States and that the Copyright Act was meant to give publishers the flexibility to treat U.S. and foreign markets differently for a particular book or other copyrighted item.

In its March 19 decision in Kirtsaeng v. John Wiley & Sons Inc., the Supreme Court disagreed with that interpretation. Writing for the majority, Justice Stephen G. Breyer analyzed the interplay of complex provisions of the Copyright Act and concluded that Congress did not intend to restrict the first-sale doctrine geographically.

"We ... 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," Justice Breyer said.

Lawyers for Kirtsaeng and for groups that filed briefs on his side, including the American Library Association, had made arguments that the publisher's view of the law could limit classroom teachers at the K-12 or college level from using certain foreign-produced copies, and that school libraries might be chilled from distributing certain works in their collections.

Breyer picked up on some of these arguments. For example, he cited a major provision of the Copyright Act that gives teachers the right to perform or display copyrighted works without the holder's permission "in the course of face-to-face teaching activities" as long as the teacher did not knowingly use a copy "that was not lawfully made under this title."

But the geographic interpretation sought by publishers "would mean that the teacher could not (without further authorization)use a copy of a film during class if the copy was lawfully made in Canada, Mexico, Europe, Africa, or Asia," Breyer said.

Meanwhile, libraries, booksellers, and others would face difficulties under the publishers' interpretation, Breyer said. "Are the libraries to stop circulating or displaying the millions of books in their collections that were printed abroad?" he wondered.

Breyer's opinion was joined by Chief Justice John G. Roberts Jr. and Justices Clarence Thomas, Samuel A. Alito Jr., and Elena Kagan.

Justice Ruth Bader Ginsburg wrote a dissent that was joined in full by Justice Anthony M. Kennedy and in most part by Justice Antonin Scalia.

Ginsburg said the majority was adopting an interpretation of the Copyright Act "at odds with Congress' aim to protect copyright owners against the unauthorized importation of low-priced, foreign-made copies of their works."

She said there was other language in the act that would protect "against the absurd consequences imagined by the [majority]." For example, one provision permits an organization operated for "scholarly, educational, or religious purposes" to import, without the copyright owner's permission, up to five foreign-made copies of a book for "library lending or archival purposes."

Ginsburg also said "it should not be overlooked that the ability to prevent importation of foreign-made copies encourages copyright owners such as Wiley to offer copies of their works at reduced prices to consumers in less-developed countries who might otherwise be unable to afford them."

With the court's decision preventing publishers from barring the importation of such cheaper versions to compete with U.S. editions, Ginsburg said they may choose to raise the prices of the overseas editions. "Such an outcome would disserve consumers—and especially students—in developing nations and would hardly advance the American foreign policy goals of supporting education and economic development in such nations," she said.

The Association of American Publishers, which represents educational publishers, issued a statement expressing its disappointment with the decision.

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