U.S. Supreme Court Weighs Book Resale Rights

U.S. Supreme Court Weighs Book Resale Rights
  • Opening Intro -

    Buying and selling textbooks is nothing new, a practice college students have long enjoyed for generations.

    However, if the textbook is bought abroad, shipped or taken to the U.S. and used by a student, the rights of that student to resell the book may be different.

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First-Sale Doctrine

On Monday, the U.S. Supreme Court heard oral arguments in a copyright-infringement case, one that will affect buyers, businesses, libraries and other institutions depending on how the court rules. The case, Kirtsaeng v. John Wiley & Sons, will impact everyone that buys, lends, resells or displays copyrighted material made and purchased outside of the United States reports the Chronicle of Higher Education.

Book buyers, including college students, have long stood on the first-sale doctrine of copyright law, whether they realized they were or not. Under that provision, the buyer of a college textbook had the right to use or resell a book without the permission of the publisher. Used-book store operators have long stood on this law, a principle that enables them to run their businesses.

Court Ruling

The case stems from the practice of a Thai national, Supap Kirtsaeng, who attended university in the United States. While attending university, his family purchased and shipped textbooks made in his native Thailand to him. Kirtsaeng soon developed a home-based business where he resold the books for a profit. That so-called “gray market” was exploited by Kirtsaeng and challenged by Wiley, the latter winning a lower court ruling that ordered Kirtsaeng to pay Wiley $600,000.

On the one side are owners of copyrighted works who insist that they have the right to buy and sell what they own under the first-sale doctrine. On the other side are publishing companies such as Wiley as well as the software, music and motion picture industries. Large retailers, including eBay and Costco, have also been targeted, purveyors of gray-market products. Also joining Kirtsaeng are libraries and second-hand bookstores.

Gray Market Goods

The gray market is a huge one, reportedly costing U.S. manufacturers up to $63 billion in sales each year reports Bloomberg Businessweek.

A 1998 Supreme Court decision unanimously upheld the right of individuals and companies to resell items made in the United States and bought overseas back in the U.S. That ruling cleared the way for people to buy and resell affected items even if the copyrighter objected to the practice. A ruling on the Kirtsaeng case will affect the sale of items made overseas and brought to the U.S.

Kirtsaeng, who studied at the University of Southern California, worked with his Thailand-based family to have books shipped from his home country for resale in the United States. That lucrative practice netted him more than $900,000, as the intrepid businessman acquired low cost books abroad for U.S. distribution.

Supreme Court

Kirtsaeng’s supporters believe that an item that is bought by someone is owned by that person to do what they want with it. Where he crosses the line is setting up his own distribution network, a gray market effort that undermines businesses such as Wiley’s while giving companies, such as eBay, an opportunity to buy and sell goods.

The U.S. District Court for the Southern District of New York ruled against Kirtsaeng and the U.S. Court of Appeals for the Second Circuit upheld that decision. A similar U.S. Supreme Court decision ended in a 4-4 deadlock in 2010 as Justice Elena Kagan recused herself. This time, Kagan is expected to vote, with a final decision likely later this term.

As for today’s college students, the ramifications of a future U.S. Supreme Court decision will be far-reaching. Both sides are offering compelling arguments, but it could come down to just one justice casting a vote that will settle this matter.

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