Written by Susan Neuberger Weller
The U.S. Supreme Court has granted cert in order to decide an issue of great importance to all businesses involved in manufacturing and distributing products throughout the world, particularly those involved in retailing and importation, namely, whether foreign made works intended for sale outside the U.S., in which the copyright is owned by a U.S. entity, may be purchased outside the U.S., imported into the U.S., and then resold or otherwise disposed of in the U.S. without the copyright owner’s authorization.
At issue is the scope of the "first sale" doctrine. This doctrine allows "the owner of a particular copy [of a copyrighted work]…lawfully made under "the US Copyright Act to resell the copyrighted work without the permission of the copyright owner. For example, someone who owns a particular piece of artwork which is protected by copyright is permitted to sell that piece of artwork without getting the permission of the owner of the copyright in the work to do so. In the case to be decided, a U.S. book publisher‘s textbooks manufactured and meant for sale in Asia were purchased in Asia, shipped into the U.S., and resold in the U.S. The content of the books was the same but the materials used in the manufacturing process were of different quality.
Both the U.S. District Court and the U.S. Federal Court of Appeals which considered the case found that the first sale doctrine did not apply to works manufactured outside the U.S. It is now up to the Supreme Court to make the final determination on this issue, which will resolve a split among U.S. Federal Courts of Appeal regarding the territorial reach of this doctrine.
The Court previously had the opportunity to decide this issue in 2010 in Costco Wholesale Corp v. Omega S.A. case, but the recusal of Justice Kagan from that case resulted in a 4-4 split opinion, which automatically affirmed the appellate court’s decision without opinion.