The Supreme Court is set to hear oral arguments on October 29 that could decide whether long-held “first sale” rights under the Copyright Act extend to goods manufactured overseas. But a newly formed coalition of business and libraries is already anticipating the next front in the battle: Congress. In a press call yesterday, the Owners' Rights Initiative (ORI), a coalition of retailers, libraries (including the ALA and the ARL), and Internet companies like eBay, Overstock.com and Redbox, outlined its agenda and noted that whatever the outcome in the courts, the issue will almost certainly reach the legislature at some point. “Rather than wait for the Supreme Court decision and then developing a legislative strategy,” explained ORI executive director Andrew Shore, “we are doing that now.”
So what is the ORI’s agenda? “Our position is simple,” said Shore. “If you bought it, you own it, and you can resell it, rent it, lend it or donate it.”
Shore said ORI would serve to advocate for ownership rights while educating consumers, businesses and policymakers. “For over 100 years in the United States, if you bought something, you owned it and could resell it,” he explained, in a statement. “Once the copyright owner makes the first sale, the right of ownership, and therefore the right to distribute, is transferred to the purchaser. Today, this fundamental ownership right is at issue in the Kirtsaeng vs. Wiley case, which will be argued before the Supreme Court on October 29.”
Indeed, next week’s Supreme Court case will address the fallout from an August, 2011 ruling in John Wiley & Sons, Inc. v. Supap Kirtsaeng in which Kirtsaeng, a Thai-born U.S. student was successfully sued by Wiley for importing and reselling in the U.S. foreign editions of Wiley textbooks made for exclusive sale abroad. In its verdict, a three-judge panel of the Second Circuit affirmed, by a 2-1 margin, that Kirtsaeng could not avail himself of the first sale doctrine because the law says that products must be “lawfully made.” The Second Circuit court held that those two words—“lawfully made”—limit first sale “specifically and exclusively” to works that are made in territories in which the U.S. Copyright Act is law, and “not to foreign-manufactured works.”
That decision has raised alarms for a number of businesses, including libraries and the used book trade, and online sellers like Amazon, and eBay. In an amicus brief filed with the Supreme Court on July 3, the Library Copyright Alliance (LCA) argued that the Second Circuit’s ruling, if left to stand, could strip libraries of their first-sale right to lend copies of not only books published abroad, but merely printed abroad. Although the LCA brief acknowledges that libraries could likely assert the right to lend foreign-manufactured books based on other, more limited exceptions in the Copyright Act, such as “fair use or implied license,” the uncertainty created by the Second Circuit could deter many libraries from lending materials in question.
In a recent interview with PW, lawyer Jonthan Band, who authored the LCA brief, said a ruling upholding the Second Circuit’s interpretation of First Sale would be “a blow to the heart of the library enterprise,” because it would mean libraries conceivably could not lend books that were printed abroad. “Not only books from foreign publishers,” Band explained, “but American-published books that are merely printed overseas.” The LCA brief notes that a significant portion of U.S. library collections consist of resources that were manufactured overseas and that more than 200 million books in U.S. libraries have foreign publishers.
Publishers, however, have downplayed those fears. Both the AAP and the SIIA have filed briefs downplaying the possible effects on libraries, used booksellers, and other businesses. “As Kirtsaeng tells it,” the AAP brief states, “every American manufacturer will hasten overseas in search of ‘the manufacturer’s Holy Grail'—the power to lock up, extract exorbitant rents from, or discriminate in any secondary market.” But there is “no evidence whatever that John Wiley (or other publishers) plan to transfer manufacturing abroad so as to engage in the hyper-control petitioner feverishly imagines.” The AAP argues that the Court should not be swayed by“extravagant hypotheticals,” and suggests that a reversal in the case would render U.S. copyrights “radically insecure.”
Without question, ownership has become a thorny issue in a digital age that favors licensed access. On another front, a company called Redigi is currently fighting to extend first sale to the digital realm. And recently, Random House officials have muddied the "ownership" waters by suggesting that libraries own the e-books they buy, when in reality, they do not.
