Booking It to the Supreme Court: The Evolution of the First Sale Doctrine and Kirtsaeng v. John...

219

BOOKING IT TO THE SUPREME COURT: THE EVOLUTIONOF THE FIRST SALE DOCTRINE AND KIRTSAENG V. JOHN

WILEY & SONS, INC.

CHRISTOPHER J. ADAMS

I. INTRODUCTION

Normally under copyright law, if a good has been manufactured inthe United States and there is an original domestic sale,1 a subsequentpurchaser can do what they will with the good because the copyrightQ1MXV-9, right to further distribute it is exhausted.2 However, if the goodis foreign-made and sold in the United States without the domesticcopyright Q1MXV-9, /V-3P,,P12h +QV ,VMMV- Y1)MX oV MPpoMV T1-infringement.3

This focus on the place of manufacture is integral for a properreading of the first sale doctrine,4 which is the underlying concept withincopyright law governing how parties may sell and distribute goodsreceived from manufacturers.5 While the Supreme Court has recentlyruled that goods manufactured abroad are protectable under theCopyright Act6 and thus their importation does not infringe the domesticY1/l-PRQ+ Q1MXV-9, -PRQ+,h /)oMPY /1MPYl XPY+p+V, +Qp+ !12R-V,, p3V2X +QVAct irrespective of the decision.

Without this amendment, it is likely that producers would facesignificant economic harm as a result of an influx of cheaper foreign-manufactured goods. There is already a template in place for such an

1. This sale could be from the original manufacturer to a distributor, directlybetween the manufacturer and the consumer, or some other kind of legitimate sale.

2. This is the simplest application of the first sale doctrine, an idea this Note willexplore in-depth.

3. B2V ,P3PMp- +l/V 1T P3/1-+p+P12 P, +QV +-pXV P2 SR-Vl 3p-NV+= R11X,h nQV-V R11X,are made available at cheaper prices by sellers with little to no relation to the originalmanufacturer. While how these goods may be legal is not the focus of this Note, thepotential illegality of such imports is, as it is the central issue in the case of John Wiley &Sons, Inc. v. Kirtsaeng, 654 F.3d 210 (2d Cir. 2011), C);6+, 133 S. Ct. 1351 (2013).

4. This concept has been ingrained in American jurisprudence for over 100 years.Copyright statutes themselves have existed since the early 20th century, but the first saleX1Y+-P2V9, O)XPYPpM RV2V,P, Yp2 oV +-pYVX +1 LDeE p2X +QV P2TM)V2+PpM Yp,V 1T "1oo,-MerrillCo. v. Straus, 210 U.S. 339 (1908). This was a common law doctrine until the Copyright#Y+ 1T LDFG Y1XPTPVX +QV !1)-+9, Q1MXP2Rg See infra Part II.

5. See First Sale Doctrine, N.Y. STATE SCI. & TECH. LAW CTR.,http://nysstlc.syr.edu/Law_Resources/Law_Library/Copyright/FirstSaleDoctrine/FirstSalvesDocrtrine.aspx (last visited Apr. 1, 2014).

6. Subject to the limitations discussed in this Note.

220 THE WAYNE LAW REVIEW [Vol. 60:219

p3V2X3V2+C +QV ZP2+Q !P-Y)P+9, 3PmVX RV1R-p/QPYpMf212-geographicaldefinition of the first sale doctrine.7

Part II of this Note outlines the line of cases concerning both thebirth and modification of the first sale doctrine, including how it has notbeen concretely defined as it is constructed within the Copyright Act.Part III analyzes the recent Supreme Court decision, Kirtsaeng v. JohnWiley & Sons,8 the policy concerns underlying the decision, and why(and how) Congress should intervene so that the policy effects areminimized. Finally, Part IV will conclude that without congressionalintervention, it is likely that at least some deleterious policy concernswill occur, negatively impacting consumers and producers alike.

II. BACKGROUND

A. Bobbs-Merrill and the Origination of the First Sale Doctrine

While Congress enacted the modern Copyright Act in 1976,9 theUnited State Supreme Court first recognized the conceptual notionsbehind the doctrine almost seventy years earlier in Bobbs-Merrill v.Straus.10 Bobbs-Merrill, a book publisher, sent notice to distributors thatthe sale of its books at a price less than $1.00 would constituteinfringement.11 <QV XVTV2Xp2+,h nQ1 p+ +Qp+ +P3V 1n2VX [pYl9,department stores, disregarded the notice and sold Bobbs-[V--PMM9, o11N,without its consent for less than $1.00.12

In reaching its decision, the Court looked primarily at the availablecopyright statutes, as statutes often answer the question of how acopyright could be protected.13 As such, the Court felt it necessary toVmp3P2V +QV P,,)V SP2 (PVn 1T +QV Mp2R)pRV 1T +QV ,+p+)+Vh -VpX P2 +QV MPRQ+1T P+, 3pP2 /)-/1,Vg=14 The Court held that while the statutes protected acopyright owner in his ability to replicate and sell his products, they did

7. See Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008).8. 133 S. Ct. 1351 (2013). Kirtsaeng is the most recent examination of the first sale

X1Y+-P2Vh p2X +QV >)/-V3V !1)-+9, -)MP2R P2 P+ P, P2+VR-pM +1 T)-+QV- XP,Y),,P12, p2Xreadings of the doctrine. The ruling, while definitive, does leave the door open forcongressional intervention. As this Note will discuss, Congress should amend theCopyright Act in order to make the first sale doctrine protect both consumers andproducers, especially in light of the possible policy consequences to be examined later inthis Note. See infra Parts III.B, III.C.2.

9. 17 U.S.C.A. §§ 101-1332 (West 2013).10. 210 U.S. 339 (1908).11. Id. at 341.12. Id.13. Id. at 348 (citing Rev. Stat. §§ 4952, 4965, 4970 (1901)).14. Id. at 350.

2014] BOOKING IT TO THE SUPREME COURT 221

21+ Y-Vp+V S+QV -PRQ+ +1 P3/1,V g g g p MP3P+p+P12 p+ nQPYQ +QV tR11Xs ,QpMMoV ,1MX p+ -V+pPM ol T)+)-V /)-YQp,V-,g=15 This holding is widely regardedas the beginning of the first sale doctrine.16

B. Modern Evolution of the First Sale Doctrine

1. 5=Lc!?] X!H% ;M V6LH[L

5=Lc!?] X!H% ;M V6LH[L was a landmark case expounding both themodern conception of the first sale doctrine as well as the tensionbetween §§ 109(a) and 602(a) of the Copyright Act.17 In Quality King,the Supreme Court had to decide if infringement occurred when animporter acquired United States-made products abroad and then resoldthose products within the United States.18 In applying the first saledoctrine to these goods, the Court first examined the relevant portions ofthe Copyright Act.19

The Court began with § 109(a).20 In essence, § 109 was Bobbs-Merrill codified, stating that a purchaser of a good may dispose of or sellthat good as they saw fit.21 The plaintiff, \9p2kph p ,Qp3/11manufacturer,22 did not couch its argument under the language of§ 109(a), rather, it argued that another section of the Copyright Act,§ 602(a), protected it from foreign distributors reselling its products inAmerica.23 This provision, according to the Court, did not automatically

15. Id.16. Id.17. @)pMP+l ]P2R wP,+-Pogh `2Yg (g \9p2kp ?V,Vp-YQ `2+9Mgh `2Ygh HKJ :g>g LJH jLDDEi& LF

U.S.C.A. §§ 109(a), 602(a) (West 2013).18. Quality King, 523 U.S. 135 (1998).19. Id. at 135-36.20. Id. at 143.21. >+p+VX P2 -VMV(p2+ /p-+h ' LeDjpi /-1(PXV, +Qp+ St2s1+nP+Q,+p2XP2R +QV /-1(P,P12, 1T

§ 106(3), the owner of a particular copy . . . lawfully made under this title, or any personauthorized by such owner, is entitled, without the authority of the copyright owner, to sell1- 1+QV-nP,V XP,/1,V 1T +QV /1,,V,,P12 1T +Qp+ Y1/lg= LF :g>g!g#g ' LeDjpi (West 2013).22. On first glance, it may be unclear how a producer can copyright a shampoo bottle.

\9p2kp Y1/l-PRQ+VX +QV MpoVM pTTPmVX +1 its bottles, and the ability to do so has broadpolicy repercussions. A distributor can place a copyrighted label on non-copyrighted, orperhaps even piratical, goods and have the ability to exert downstream control over them.23. Quality Kingh HKJ :g>g p+ LIJ jXV+V-3P2P2R +Qp+ \9p2kp /)-,)VX +QP, 1/+P12

oVYp),V +QVl Y1)MX 21+ p-R)V +Qp+ S)2p)+Q1-PkVX -V,pMV, ol P+, X13estic distributors [are]p2 P2T-P2RV3V2+ 1T P+, VmYM),P(V -PRQ+ +1 XP,+-Po)+V=i& LF :g>g!g#g ' GeKjpi j6V,+ KeLJijS[I]mportation into the United States, without the authority of the owner of copyrightunder this title . . . is an infringement of the exclusive right to distribute copies orphonorecords under section 106 . . . .=ig


forbid the unauthorized importation of copyrighted goods;24 the languageof § 602(a) instead merely limited the exclusive right of distribution.25

As the Court explained, importation without the authority of thecopyright owner was a violation under § 106.26 Yet the language of thestatute stated +Qp+ \9p2kp9, SVmYM),P(V= -PRQ+ +1 XP,+-Po)+V )2XV- § 106was limited by §§ 107-122.27 Found within these limiting sections is theTP-,+ ,pMV X1Y+-P2V 1T ' LeDjpih SnQPYQ Vm/-V,,Ml /V-3P+, +QV 1n2V- 1T pMpnT)MMl 3pXV Y1/l +1 ,VMM +Qp+ Y1/lg=28 Because § 602(a) states thatimportation of a copyrighted good without permission is a violationunder § 106, which itself is limited by § 109(a), the first sale doctrinep//Vp-VX +1 MP3P+ ' GeKjpi9, -PRQ+ +1 XP,+-Po)+Vg29

Further, due to the limitation imposed by the first sale doctrine, anysubsequent purchaser of a copyrighted item Slawfully made under this+P+MVh= p, \9p2kp9, R11X, nV-Vh np, p2 S1n2V-= 1T +Qp+ P+V3g30 The Courtfound that ' LeDjpi S)2p3oPR)1),Ml ,+p+V, +Qp+ ,)YQ p2 1n2V- ;P,V2+P+MVXh nP+Q1)+ +QV p)+Q1-P+l 1T +QV Y1/l-PRQ+ 1n2V-h +1 ,VMM9 +Qp+P+V3g=31 <QV-VT1-Vh \9p2kp9, p++V3/+VX ),V 1T ' GeKjpi +1 op- Quality]P2R9, ,pMV 1T +QVP- R11X, TpPMVXg32

a1nV(V-h +QV !1)-+ 2VP+QV- T)MMl /p-,VX +QV Mp2R)pRV 1T SMpnT)MMl3pXV )2XV- +QP, +P+MV=33 nor did they address whether it would have beeninfringement if the goods were manufactured abroad.34 Instead, it left thisinterpretation to subsequent courts.35 By not addressing these issues inQuality King, the Court left the first sale doctrine without clear guidance.This lack of clarity led to U.S. Circuit Courts following their ownprecedents, as was the case for the Ninth Circuit in Omega S.A. v. Costco

24. Id. at 144-45.25. Id.26. Id. (explaining that this limitation was akin to the Bobbs-Merrill holding that the

right to vend is limited). See generally 17 U.S.C.A. § 602(a) (West 2013).27. 17 U.S.C.A. § 106 (West 2013).28. Quality King, 523 U.S. at 144; 17 U.S.C.A. § 109(a) (West 2013).29. Quality King, 523 U.S. at 136-37.30. Id. (stating that /)-YQp,V-, T-13 p X13V,+PY 1- T1-VPR2 -V,VMMV- nV-V o1+Q SMpnT)M

1n2V-,=ig31. Id. at 145 (quoting 17 U.S.C.A. § 109(a) (West 2013)).32. Id.33. Id. at 154 (Ginsburg, J., concurring) (noting that the Court did not address if

SMpnT)MMl 3pXV )2XV- +QP, +P+MV= 3Vp2+ either lawfully made in the United States orlawfully made under the Copyright Act).34. Id. at 154.35. Quality King, 523 U.S. at 154.


Wholesale Corp.,36 and the Second Circuit in John Wiley & Sons, Inc. v.Kirtsaeng.37

2. Omega S.A. v. Costco Wholesale Corp.

`2 +QP, Yp,Vh pMM 1T B3VRp9, >nP,,-made watches bore a designcopyrighted in the United States.38 Omega sold these watches toauthorized distributors overseas; third party buyers then obtained thewatches and put them on the grey market.39 Costco then obtained thewatches via the grey market in order to resell them in the United States.40Omega authorized the first foreign sale, but did not authorize theX13V,+PY P3/1-+p+P12 1- !1,+Y19, ,pMV,g41 The Ninth Circuit had toXV+V-3P2V nQV+QV- +QV >)/-V3V !1)-+9, XVYP,P12 P2 Quality Kingnecessitated overruling previous precedent allowing the first saledoctrine as a defense only when the goods in question were3p2)TpY+)-VX 1- ,1MX P2 +QV :2P+VX >+p+V, nP+Q +QV 1-PRP2pM 1n2V-9,permission.42

The Ninth Circuit declined to overturn its precedent, holding that§ LeDjpi 1T +QV !1/l-PRQ+ #Y+ S/-1(PXVtXs 21 XVTV2,V +1 p2 P2T-P2RV3V2+action . . . that involves . . . foreign-made, nonpiratical copies of a U.S.-copyrighted work . . . .=43 Here, because Omega manufactured theirnp+YQV, P2 >nP+kV-Mp2Xh p2X !1,+Y1 S[re]sold them in the United StatesnP+Q1)+ B3VRp9, p)+Q1-P+lh +QV TP-,+ ,pMV X1Y+-P2V= np, 21+ p (pMPXdefense.44

The Omega court used a twofold justification to reach thisconclusion.45 First, to interpret the statute otherwise wouldSP3/V-3P,,PoMl Vm+V2X +QV !1/l-PRQ+ #Y+ Vm+-p+V--P+1-PpMMlg=46 Second, toQp(V S' LeDjpi pT+V- T1-VPR2 ,pMV, n1)MX ;-V2XV- ' GeK (P-+)pMMl

36. 541 F.3d 982 (9th Cir. 2008).37. 654 F.3d 210 (2d Cir. 2011), C);6+, 133 S. Ct. 1351 (2013).38. Omega, 541 F.3d at 983.39. Id. at 984; see also Jorge Espinosa, What is the Parallel Market?, THE GRAY

BLOG, http://espinosaiplaw.com/wordpress/?page_id=5 (last visited July 18, 2012)(defining the grey market p, p 3p-NV+ P2 RV2)P2V MVRpM R11X, S,1MX 1)+,PXV 1T +QVP-p)+Q1-PkVX YQp22VM, 1T +-pXV=ig40. Omega, 541 F.3d at 984.41. Id.42. Id. at 983.43. Id.44. Id.45. Id. at 986.46. Omega, 541 F.3d at 986.


3Vp2P2RMV,,9= pRpP2,+ p2 )2p)+Q1-PkVX P3/1-+p+P12g47 The Omega courtexamined Quality King9, XP,Y),,P12 1T Vm+-p+V--P+1-PpMP+l48 and found itreconcilable with its SRV2V-pM MP3P+p+P12 1T ' LeDjpi +1 Y1/PV, +Qp+ p-VMpnT)MMl 3pXV P2 +QV :2P+VX >+p+V,g=49 The court reasoned that this wasbecause, unless the statute itself dictates otherwise, U.S. statutesgenerally only apply to acts occurring within the United States.50

For the c1)-+h ' LeDjpi9, ,+P/)Mp+P12 +Qp+ +QV R11X, 3),+ oV SMpnT)MMl3pXV )2XV- +QP, +P+MV= 3Vp2+ 31-V +Qp2 O),+ R11X, 3p2)TpY+)-VX ol pU.S. copyright owner.51 `2,+VpXh ,13V+QP2R SMpnT)MMl 3pXV )2XV- +QP,+P+MV= 3Vp2+ +Q1,V Y1/PV, nV-V 3pXV SnP+QP2 +QV :2P+VX >+p+V,h nQV-V +QV!1/l-PRQ+ #Y+ p//MPV,g=52 ?VRp-XMV,, 1T +QV Y1)-+9, XV+V-3P2p+P12however, if Congress had explicitly expressed a desire for the CopyrightAct to apply extraterritorially, the court would have deferred to thelegislature.53 This lack of concrete guidance allowed other circuits tointerpret the Act as they saw fit, thus creating further confusion as to itsproper construction.54 The Second Circuit in John Wiley & Sons, Inc. v.Kirtsaeng added to this tension and confusion by further narrowing thescope of the first sale doctrine.55

3. John Wiley & Sons, Inc. v. Kirtsaeng

The Second Circuit held that even if the goods were manufactured bya foreign subsidiary, the first sale doctrine did not apply afterimportation.56 The defendant, Kirtsaeng, a student, purchased foreign-

47. Id. (quoting CBS v. Scorpio Music Distribs., 569 F. Supp. 47, 49 (E.D. Pa.1983)).48. Id. p+ DEF jVm/MpP2P2R +Qp+ S3V-VMl -VY1R2PkP2R +QV VmP,+V2YV 1T ,)YQ tT1-VPR2s

,pMV,= XPX 21+ -V.)P-V p2 SVm+-p+V--P+1-PpM p//MPYp+P12 1T +QV #Y+=ig49. Id. at 987.50. Id. at 987-88 (quoting RESTATEMENT (SECOND) OF FOREIGN RELATIONS LAW OF

THEUNITED STATES § 38 (1965)).51. Id. at 988.52. Omega, 541 F.3d at 988 (justifying this conclusion by finding that if making

copies overseas were deemed lawful under the Act, P+ n1)MX Sp,Y-PoV MVRpMP+l g g g +1conduct . . . occur[ring] entirely outside the United States,= and make the Copyright ActSP3/V-3P,,PoMl p//Ml g g g Vm+-p+V--P+1-PpMMl=ig53. Id.; see also Subafilms, Ltd. v. MGM-Ap+QV !133Y92, !1gh 24 F.3d 1088, 1096

(9th Cir. 1994) jS<QV-V P, 21 YMVp- Vm/-V,,P12 of congressional intent . . . to alter the/-VVmP,+P2R Vm+-p+V--P+1-PpMP+l X1Y+-P2Vg=ig54. It is also important to note that Omega went to the Supreme Court, where the

Justices split evenly without a written opinion (Justice Kagan took no part in theconsideration or decision). See Costco Wholesale Corp. v. Omega, S.A., 131 S. Ct. 565(2010) (mem.) (per curiam).55. 654 F.3d 210 (2d Cir. 2011), C);6+, 133 S. Ct. 1351 (2013).56. Id. at 213.


VXP+P12 +Vm+o11N, T-13 6PMVl9, Asian subsidiary.57 The foreign editions/)-YQp,VX Y12+pP2VX p SXV,PR2p+P12= ,+p+P2R +QVl nV-V 12Ml pMM1nVX +1 oVsold in certain regions.58 Regardless, Kirtsaeng imported them into theUnited States and sold them via several online retailers.59While the court21+VX +QV S+V2,P12 oV+nVV2 ' GeKjpijLi g g g p2X ' LeDjpih=60 it citedQuality King9, XPY+p61 in holding that the first sale doctrine did notapply.62

After performing a statutory analysis,63 +QV Y1)-+ QVMX +Qp+ SMpnT)MMl3pXV )2XV- +QP, +P+MV= 3Vp2+ SMpnT)MMl 3pXV P2 +QV :2P+VX >+p+V,h= P2 /p-+because of the presumption that U.S. statutes do not applyextraterritorially.64 However, a textual analysis was not enough for thecourt, as it noted that other Copyright Act provisions SVm/MPYP+Ml +pNVpYY1)2+ 1T pY+P(P+l 1YY)--P2R po-1pXg=65 After being confronted withnQp+ +QV Y1)-+ YpMMVX p2 S)++V-Ml p3oPR)1), +Vm+,=66 the court relied onthe aforementioned Quality King dicta to interpret § 109(a) to notsubstantially conflict with § 601(a)(1).67

The dissent argued that if Congress had intended the first saledoctrine to be limited to domestic goods, it could have easily added thelanguage as it had done in other sections.68 The dissent continued, stating

57. Id.58. Id. (giving +QV XV,PR2p+P12 p,C SThis book is authorized for sale in Europe, Asia,

Africa and the Middle East only [and] may not be exported. Exportation from orimportation of this booN +1 p21+QV- -VRP12 nP+Q1)+ +QV A)oMP,QV-9, p)+Q1-Pkp+P12 P, PMMVRpMp2X P, p (P1Mp+P12 1T +QV A)oMP,QV-9, -PRQ+,g=ig59. Id.60. Id. at 217.61. Wileyh GHI cgJX p+ KLE jYP+P2R @)pMP+l ]P2R wP,+-Pogh `2Yg (g \9p2kp ?V,Vp-YQ

`2+9Mgh `2Ygh HKJ :g>g LJH jLDDE), which states that S' LeDjpi p2X +QV VmYV/+P12, P2 '602(a) . . . retain significant independent meaning . . . . [§ 602(a)] encompasses copiesthat are not subject to the first sale doctrineUe.g., copies . . . lawfully made under the lawof another count-lg=i& see also Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982,988 (9th Cir. 2008).62. Wiley, 654 F.3d at 218.63. Id. at 219 (stating that +n1 TpY+1-, 3pNV p2pMlkP2R +QV +V-3, S3pXV= p2X S)2XV-=

31-V Y13/MVmC SjLi +QV n1-X ;3pXV9 P, 21+ p +V-3 1T art in the Copyright Act, and (2)t+sQV n1-X ;)2XV-9 P, tps ;YQp3VMV129 p2X Y1)-+, ;3),+ X-pn P+, 3Vp2P2R T-13 P+,Y12+Vm+9=ig64. Id.65. Id. j21+P2R ' LeIjoijKi /-1(PXV, +Qp+ St+sQV n1-N, ,/VYPTPVX ol ,VY+P12, LeK p2X

103, when published, are subject to protection under this title if the work is firstpublished in the United States or in a foreign nation=i jV3/Qp,P, pXXVXig66. Id. at 220.67. Id.68. Wiley, 654 F.3d at 226-27 (Garvan Murtha, J., dissenting); see, e.g., 17 U.S.C.A.

§ 601(a) (West 2013) jSt`s3/1-+p+P12 P2+1 1- /)oMPY XP,+-Po)+P12 P2 +QV :2P+VX >+p+V, 1Tcopies of a work . . . protected under this title is prohibited unless the portions consisting


that policy considerations would support application of the first saledoctrine to foreign goods.69 cP-,+h +QV-V np, p SY13312 Mpn /1MPYlagainst restraints on trade and alienation . . . not [being] limited by theplace of ma2)TpY+)-Vg=70 Second, significant economic justifications,such as high transaction costs, uncertainty, and nervousness in secondarymarkets71 lent credence to having the first sale doctrine apply to bothforeign and domestic goods.72 Further, the dissent argued that there was21+QP2R P2 ' LeDjpih 1- p2l 1T +QV TP-,+ ,pMV X1Y+-P2V9, /)-/1,V, 1-policies, that supported the idea that it was only to apply to works createdin the United States.73

<QV 3pO1-P+l ,+p+VX +Qp+ PT +QVl QpX S3P,)2XV-,+11X !12R-V,,P12pMpu-/1,V=74 1- PT +QVP- XVYP,P12 MVX +1 S)2/pMp+poMV= /1MPYl Y12,V.)V2YV,which Congress did not foresee, Congress could preempt the c1)-+9,ruling.75 The Supreme Court subsequently granted certiorari in order toresolve the first sale dilemma and decide whethe- +QV >VY12X !P-Y)P+9,P2+V-/-V+p+P12 1T SMpnT)MMl 3pXV )2XV- +QP, +P+MV= was correct.

of such material have been manufactured in the United States 1- !p2pXpg=i jV3/Qp,P,added) (repealed 2010).69. Wiley, 654 F.3d at 226-27 (Garvan Murtha, J., dissenting).70. Id. Under the 1909 Copyright Act (codifying the BobbsWMerrill holding) and the

LDIF !1/l-PRQ+ #Y+h +QV TP-,+ ,pMV X1Y+-P2V p//MPVX +1 Sany copy of a copyrighted workthe possession of which has been lawfully obtained.= A)og \g Z1g GeW349, 35 Stat. 1075,1084 (1909); Pub. L. No. 80W281, 61 Stat. 652, 660 (1947) (emphasis added). TheQuality King !1)-+ 21+VX +Qp+ St+sQV-V P, 21 -Vp,12 +1 p,,)3V !12R-V,, P2+V2XVX VP+QV- '109jpi 1- +QV Vp-MPV- Y1XPTPYp+P12, 1T +QV X1Y+-P2V +1 MP3P+ P+, o-1pX ,Y1/Vg= @)pMP+l ]P2RwP,+-Pogh `2Yg (g \9p2kp ?V,Vp-YQ `2+9Mgh `2Ygh HKJ :g>g LJHh LHK jLDDEig >1 T1- +QV Wileydissent, the current version of § 109(a)USMpnT)MMl 3pXV )2XV- +QP, +P+MV=Uand the priorversionsUS/1,,V,,P12 1T nQPYQ Qp, oVV2 MpnT)MMl 1o+pP2VX=Ushould have similarscopes. Wiley, 654 F.3d at 227.71. Wiley, 654 F.3d at 226-27 (Garvan Murtha, J., dissenting).72. Specifically, the court mentioned that:An owner first would have to determine the origin of the copyUeither domesticor foreignUbefore she could sell it. If it were foreign made and the first saledoctrine does not apply to such copies, she would need to receive permissionfrom the copyright holder. Such a result would provide greater copyrightprotection to copies manufactured abroad than those manufactureddomestically . . . .

Id. at 227-28 (Garvan Murtha, J., dissenting) (citations omitted).73. Id. at 228 (Garvan Murtha, J., dissenting) (citations omitted).74. Id. at 222.75. Id. at 220-22.


III. ANALYSIS

Even with the >)/-V3V !1)-+9, XVYP,P12h76 congressionalpreemption is the only way which consumers and producers can salvagea satisfactory result. Although the Court stated that consideration of]P-+,pV2R9, /1MPYl Y12YV-2, /MplVX p Mp-RV -1MV P2 3pNP2R P+, -)MP2Rh +QV!1)-+ MVT+ XV+V-3P2P2R +QV P3/1-+p2YV 1T 6PMVl9, Y12YV-2, +1 !12R-V,,g77Congress should address these concerns by amending the Act and givinga definitive interpretation of the first sale doctrine, one that protects notjust consumers, but producers as well.

As the Supreme Court ruled for Kirtsaeng, Wiley and producers likeP+ n1)MX oV +QV 12V, +1 TVVM +QV XVYP,P129, /1+V2+PpMMl pX(V-,V effects. Ifthe ruling is left unchanged, consumers would be able to import foreigngoods seemingly without consequence, thus squeezing producers out ofsome markets. As such, producers may not be able to realize the profitsneeded to allow for further innovation. Congress can address theseconcerns and have the first sale doctrine reflect the needs of bothconsumers and producers; this would prevent any deleterious effects oneither side.

To fully examine these concerns, one must first look at the rulingitself. While the Court dismissed some potential interpretations of thefirst sale doctrine, Congress can still affix any meaning to the doctrine itdeems fit. A, ,)YQh !12R-V,, Yp2 ol/p,, +QV !1)-+9, -)MP2R P2 1-XV- +1find an interpretation suitable for all parties involved.

A. Statutory Interpretations Without Clear Judicial Guidance

Historically, there has been a continual lack of explicit guidancefrom either Congress or the Supreme Court as to the proper definition ofthe first sale doctrine.78 For example, a primary reason why the Omegacourt maintained its own standards for § 109(a) interpretation was due to+QV >)/-V3V !1)-+ S21+ pXX-V,,tP2Rs +QV VTTVY+ 1T ' LeDjpi YMpP3, g g gt12s Y1/PV, 3pXV po-1pXg=79 Hence, the Ninth Circuit had to rely onexam/MV, P2 +QV >)/-V3V !1)-+9, XPY+p +1 O),+PTl +QV Y12+P2)VX ),V 1T

76. See Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013).77. See infra Part III.C.2.78. The Omega and Quality King Y1)-+, QpX 1//1-+)2P+PV, +1 Y12Y-V+VMl XVTP2V S)2XV-

this titleh= o)+ +QVl XVclined to do so. This set the stage for the Second Circuit to use itsown definition.79. Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008); Quality

]P2R wP,+-Pogh `2Yg (g \9p2kp ?V,Vp-YQ `2+9Mgh `2Ygh HKJ :g>g LJHh LHI jLDDEi jbP2,o)-Rh _ghconcurring).


their precedent.80 `2,+VpX 1T Y12Y-V+VMl XVTP2P2R +QV TP-,+ ,pMV X1Y+-P2V9,scope, the court deferred, thus prolonging the uncertainty regarding the/-1(P,P129, /-1/V- ,+p+)+1-l P2+V-/-V+p+P1n.

The Second Circuit in Wiley again implemented its owninterpretation of the Act, though the court admitted that it would havefollowed Congress if it had spoken directly on the matter.81 Thisassertion can be seen as an invitation for Congress to become involved,p, +QV >VY12X !P-Y)P+ np, Y12YV-2VX nP+Q S)2/pMp+poMV= -p3PTPYp+P12,stemming from its decision.82 Any such congressional involvementwould nonetheless preempt +QV >VY12X !P-Y)P+9,h p2X V(V2 +QV >)/-V3V!1)-+9,h ruling;83 Congress interpreting its own Act would necessarilyprovide for a clearer statutory interpretation, and it would also allowCongress to address o1+Q 6PMVl p2X ]P-+,pV2R9, /1MPYl Y12YV-2,g

@M 2#) 3=FC)I) >G=C?6A <)-!A!GHd A Landmark Ruling

In essence, the entirety of Kirtsaeng revolved around five words inthe Copyright Act: SMpnT)MMl 3pXV under this title.=84 KirtsaengP2+V-/-V+VX +Qp+ /Q-p,V +1 3Vp2 S3p2)TpY+)-VX P2 pYY1-Xp2YV nP+Q +QV!1/l-PRQ+ #Y+= regardless of the geographical location,85 while Wiley3pP2+pP2VX +Qp+ P+ pY+)pMMl 3Vp2+ S3p2)TpY+)-VX P2 p /MpYV [the U.S.]nQV-V +QV !1/l-PRQ+ #Y+ R1(V-2,g=86

<QV >)/-V3V !1)-+ XV+V-3P2VX +Qp+ ]P-+,pV2R9, P2+V-/-V+p+P12 1T +QVfirst sale doctrine was proper; thus, the first sale doctrine applies when

80. Omega, 541 F.3d at 988; Quality King, 523 U.S. at 148. The court in Quality Kingstated that:

[A] publisher of [a] United States edition [of a work] and a publisher of [a]British edition of the same work, each . . . could make lawful copies. If theauthor of the work gave the exclusive United States distribution rights . . . tothe publisher of the United States edition and the exclusive British distributionrights to the publisher of the British edition, however, presumably only thosemade by the p)oMP,QV- 1T +QV :2P+VX >+p+V, VXP+P12 n1)MX oV SMpnT)MMl 3pXV)2XV- +QP, +P+MV= within the meaning of § 109(a). The first sale doctrine wouldnot provide the publisher of the British edition who decided to sell in theAmerican market with a defense to an action under § 602(a) . . . .

Quality King, 523 U.S. at 148.81. John Wiley & Sons, Inc. v. Kirtsaeng, 654 F.3d 210, 222 (2d Cir. 2011).82. Id.83. See U.S. CONST. art. VI, § 2.84. 17 U.S.C.A. § 109(a) (West 2013).85. Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013).86. Numerous amici T1- 6PMVlh P2YM)XP2R B3VRp >g#gh pR-VVX +Qp+ S)2XV- +QP, +P+MV=

refers to where the Act governs, and thus the phrase could not refer to foreign madegoods as the Copyright Act does not govern conduct done in foreign markets.


goods are lawfully made abroad.87 The Court utilized several methods ofinterpretation in arriving at this conclusion: the language of othersections of the Copyright Act, legislative history, as well as a simpleMP2R)P,+PY /p-,P2R 1T SMpnT)MMl 3pXV )2XV- +QP, +P+MVg=88 It is clear whyWiley wished +QV !1)-+ +1 -VpX +QV /Q-p,V SMpnT)MMl 3pXV )2XV- +QP,+P+MV= +1 P3/1,V p RV1R-p/QPYpM MP3P+p+P12; it desired to exert some controlover domestic markets and not have to compete with cheaper importedgoods. However, this argument failed to convince the Court.

Examining the section from a linguistic approach, the most difficulttask the Court faced was affixing a concrete meaning to the wordS)2XV-g=89 To do so, the Court examined +QV n1-X9, (p-P1), dictionarydefinitions and found something suitable: SP2 pYY1-Xp2YV nP+Q.=90Significantly, the Court found no definition meaning SnQV-Vg=91 ReadingS)2Xer= +1 3Vp2 SP2 pYY1-Xp2YV nP+Q= Rave SVpYQ n1-X 1T +QV TP(V-word/Q-p,V tps XP,+P2Y+ /)-/1,Vh= nQPMV P3/1,P2R +QV RVographic limitation ofSnQV-V= )/12 +QV n1-X 3pde +QV /Q-p,V So-P,+MV nP+Q MP2R)P,+PYXPTTPY)M+PV,g=92 For the Court, examining the language of other sections ofthe Act strengthened the idea of a non-geographical reading.93 SectionLeI ,+p+V, +Qp+ R11X, S;,)oOVY+ +1 /-1+VY+P12 )2XV- +QP, +P+MV9 P2YM)XV)2/)oMP,QVX n1-N, ;nP+Q1)+ -VRp-X +1 +QV 2p+P12pMP+l 1- X13PYPMV 1T +QVp)+Q1-9 p2X n1-N, ;TP-,+ /)oMP,QVX9 P2 p2l g g g 2p+P12ts Qp(tP2Rs ,PR2VX pY1/l-PRQ+ +-Vp+l nP+Q +QV :2P+VX >+p+V,g=94 Clearly, this unambiguouslanguage led the Court to believe that Congress had no intention ofimposing a geographical limitation on the first sale doctrine when it hadnot done so in other sections of the Act.95 Furthermore, the legislativehistory of the Act supported this.96

87. Kirtsaeng, 133 S. Ct. at 1352. This truly is a monumental holding, as it ascribesextraterritorial power to the statute for the benefit of consumers and those businesses thatdeal largely with foreign-made goods. However, producers such as Wiley may feel asignificant negative economic impact from the ruling.88. Id. at 1352-54.89. Id. at 1359; see also Kucana v. Holder, 558 U.S. 233, 245 (2010) (stating that

S;)2XV-9 P, YQp3VMV12=); Ardestani v. I.N.S., 502 U.S. 129, 135 (199Li jS;t:s2XV-9 Qp,3p2l XPY+P12p-l XVTP2P+P12, p2X 3),+ X-pn P+, 3Vp2P2R T-13 Y12+Vm+g=ig90. Kirtsaeng, 133 S. Ct. at 1358 (quoting 18 OXFORD ENGLISH DICTIONARY 950 (2d

ed. 1989)).91. Id. at 1359.92. Id.93. Id. at 1359-62.94. Id. at 1359.95. Id. at 1360.96. Kirtsaeng, 133 S. Ct. at 1370.


The previous copyright acts said nothing of geography,97 so theCourt had to ask itself whether Congress introduced such a geographicallimitation to the modern Act.98 The Court answered that question in thenegative.99 For example, while a previous version of the so-calledS3p2)TpY+)-P2R YMp),V=100 contained a geographic limitation, Congresseventually phased out this clause in order to equalize treatment of copiesmanufactured both domestically and abroad.101 The fact that Congresswanted such equal treatment made the Court believe that a similar intentexisted with the first sale doctrine.102 Under the totality of theseYP-Y)3,+p2YV,h +QV !1)-+ QVMX +Qp+ SMpnT)MMl 3pXV )2XV- +QP, +P+MV=imposed no geographical limitations; so long as the foreign goods weremanufactured in accordance with the Copyright Act, the first saledoctrine applied.103

C. Potential Policy Concerns Considered by the Court

.M X!C?AL)H%6A S7LCL+) G' \GCC!Jc)A:104

Beyond examining linguistics and legislative history, the Court alsoconsidered public policy arguments. For Kirtsaeng, Congress could nothave intended the first sale doctrine to worsen the domestic economy or

97. <QV LDeD #Y+ -VpX p, T1MM1n,C StZs1+QP2R P2 +QP, #Y+ ,QpMM oV XVV3VX +1 T1-oPXhprevent, or restrict the transfer of any copy of a copyrighted work the possession of whichQp, oVV2 MpnT)MMl 1o+pP2VXg= !1/l-PRQt Act of 1909, Pub. L. No. 60W349, § 41, 35 Stat.1084 (1909); see also Copyright Act of 1947, Pub. L. No. 80W281, § 27, 61 Stat. 660(1947).98. Kirtsaeng, 133 S. Ct. at 1360.99. Id.100. 17 U.S.C. § 601, 90 Stat. 2588 (1976i jSA-P1- +1 _)Ml Lh LDEK . . . the importation

into or public distribution in the United States of copies of a work consistingpreponderantly of nondramatic literary material . . . is prohibited unless the portionsconsisting of such material have been manufactured in the United States 1- !p2pXpg=i(repealed 2010).101. Kirtsaeng, 133 S. Ct. at 1361; see also H.R. Rep. No. 94-1476 (1976).102. Kirtsaeng, 133 S. Ct. at 1362 jSt`s+ P, /p-+PY)Mp-Ml XPTTPY)M+ +1 oVMPV(V +Qp+

Congress would have sought this unequal treatment while saying nothing about it and [inthe manufacturing clause phase-1)+s ,VVNP2R +QV 1//1,P+V NP2X 1T /1MPYl R1pMg=ig103. Id. at 1371.104. <QV,V SQ1--PoMV,= P2YM)XV +QV possible outsourcing of American jobs, rogue

publishers demanding exorbitant rental payments for the use of their foreign-manufactured copyrighted material, the inability to sell or rent cars due to the largenumber of copyrighted parts, publishers or manufacturers suing libraries and internetproviders for distributing copyrighted materials, etc. Transcript of Oral Argument at 29-30, Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013) (No. 11-697), 2012 WL5305258.


shift jobs overseas.105 After all, Kirtsaeng co2+V2XVX +Qp+ 6PMVl9,interpretation would grant any good manufactured abroad containingcopyrighted material more protection domestically than similar goodsoriginating in the U.S.106 These policy concerns weighed heavily on the_),+PYV,9 3P2X, after oral arguments,107 and eventually became asignificant reason why the Court ruled for Kirtsaeng.108

]P-+,pV2R9, p3PYP109 too feared that secondary and electronic marketsn1)MX oV ,+PTMVX PT 6PMVl9, P2+V-/-V+p+P12 1T ' LeDjpi nV-V XVV3VXvalid.110 For them, the purpose oT Y1/l-PRQ+ /-1+VY+P12 np, +1 S/-131+V

105. Kirtsaeng, 133 S. Ct. at 1371.106. A domestic buyer would first have to pay for the good, then pay for a license in

order to repackage and resell it. Not only would the copyright holder be getting additionalmoney, but if the buyer did not receive a license or permission to resell the good, thecopyright holder could sue for infringement.107. Justice Breyer questioning:tdsm/MpP2 +1 3Vh oVYp),V +QVl9-V Q1--PoMV,h PT ` ,)33p-PkV +QV3h 3PMMP12, p2X3PMMP12, 1T X1MMp-,9 n1-+Q 1T P+V3, nP+Q Y1/l-PRQ+VX P2XPYp+P12, 1T ,13V NP2X P2them that we import every year; libraries with three hundred million booksbought from foreign publishers that they might sell, resale, or use; museumsthat buy Picassos that now, under our last case, receive American protection as,112 p, +Qp+ APYp,,1 Y13V, +1 +QV :2P+VX >+p+V,h p2X +QVl Yp29+ XPsplay itwithout getting permission from the five heirs who are disputing ownership ofthe Picasso copyrights. Those are some of the horribles that they sketch. And ifI am looking for the bear in the mouse hole, I look at those horribles, and thereI see that bear.

Transcript of Oral Argument, supra note 104, at 29-30. And in response to the possibilityof using a fair use defense P2 -V,/12,V +1 ]P-+,pV2R9, SQ1--PoMV,=:

[I]f you were the lawyer for the Toyota distributor, and if you were the lawyerfor the Metropolitan Museum of Art, or you are the lawyer for a universitylibrary, and your client comes to you and says, my God, I just read the SupremeCourt opi2P12g `+ ,pl, +Qp+ nV Yp29+ ,+p-+ ,VMMP2R +QV,V 1MX o11N, 1- MV2XP2Rthem, or putting them in our word processor or reselling the Toyota [because ithas a multitude of copyrighted parts, or] . . . displaying the Picasso without thepermission of the copyright holder, who may or may not be Toyota itself.What, as their lawyer, do you tell them? Do you tell them, hey, no problem; or,do you tell them, you might become a law violator; or, do you tell them, I betterlitigate this? What do you tell them?

Id. at 36-37.108. Justice Breyer, also writing the majority opinion, focused heavily on these

SQ1--PoMV,h= XP,Y),,P2R +QV3 P2 R-Vp+ XV+pPM 1(V- ,V(V-pM /pRV,g See Kirtsaeng, 133 S. Ct.at 1366.109. See Brief for eBay Inc. et al. as Amici Curiae Supporting Petitioner at 21-23,

Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2012) (No. 11-697), 2012 WL2861166; see also Brief for American Library Association et al. as Amici CuriaeSupporting Petitioner at 24-25, Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351(2013) (No. 11-697), 2012 WL 2641851.110. See Brief for eBay Inc., supra note 109, at 21-22.


+QV /-1R-V,, 1T ,YPV2YV p2X ),VT)M p-+,h=111 not to allow manufacturers toS/-PYV XP,Y-P3P2p+V p2X 3p2P/)Mp+V 3p-NV+, +1 +QV XV+-P3V2+ 1TY12,)3V-,g=112 While not explicitly agreeing with this statement, theCourt did finX ]P-+,pV2R9, Y12YV-2, S+11 ,V-P1),h +11 Vm+V2,P(Vh p2X +11MPNVMl +1 Y13V po1)+= +1 XP,3P,, p, P2,PR2PTPYp2+g113

<QV !1)-+ -Vp,12VX +Qp+ PT 6PMVl9, P2+V-/-V+p+P12 nV-V (pMPXh P+ Y1)MXforce secondary market participants to identify the source of thecopyrighted good and determine whether or not it would be legal to resellit.114 Often these participants, including libraries115 and used-bookdealers, lack the means or abilities to do so; it may be easier for them tostop dealing in those goods altogether.116 Such choices would in turnslow trade in secondary markets and negatively impact the U.S. economyas a whole.117 Furthermore, small businesses might be forced to close dueto the threat of being sued for infringement, thus creating markets onlytruly accessible to the original copyright owner.118

The Court feared for not just small businesses and secondarymarkets, but for all consumers as a whole.119 #T+V- pMMh )2XV- ]P-+,pV2R9,SQ1--PoMV,h= p +1)-P,+ /)-YQp,P2R ,V(V-pM Y1/PV, 1T p T1-VPR2 o11N +1 RP(Vto her family, or even a domestic purchaser of a computer, automobile,or other similar device,120 could be severely harmed.121 These fears were

111. Id. at 29.112. Id.113. Kirtsaeng, 133 S. Ct. at 1367.114. Id. at 1367-65.115. Id. at 1364. Some 200 million books contained within U.S. libraries come from

foreign publishers, but not all indicate exactly where they were printed. Therefore,libraries would have no concrete way of knowing whether or not a certain book wouldfall under the rule Wiley proffered. As such, libraries would either have to acquire alending license for each book, which would be undertaken at a prohibitive cost, or simplycease to lend all materials that they even suspect of infringing a copyright. Id.116. Id.117. Id.; see generally U.S. CENSUS BUREAU, U.S. BUREAU OF ECON. ANALYSIS, News

(June 8, 2012) (stating that between January and April 2012, the United States hasalready imported $2,869,000,000 worth of used or second-hand goods).118. Kirtsaeng, 133 S. Ct. at 1365; see also Disenos Artisticos E Industriales S.A. v.

Costco Wholesale Corp., 97 F.3d 377, 380 (9th Cir. 1996i jS[E]very little gift shop inAmerica would be subject to copyright penalties for genuine goods purchased in goodfaith from American distributors, where unbeknownst to the gift shop proprietor, thecopyright owner had attempted to arrange some different means of distribution severaltransactions backg=ig119. Kirtsaeng, 133 S. Ct. at 1354-66.120. Id. at 1365. Even if these electronic or automotive goods were made abroad with

+QV X13V,+PY Y1/l-PRQ+ Q1MXV-9, /V-3P,,P12h +QVl pMM Y12+pP2 3l-PpX /p-+, individuallycopyrighted by other companies; the Court was concerned that a potential reseller wouldhave to obtain pV-3P,,P12 T-13 +QV Q1MXV- 1T V(V-l /p-+9, Y1/l-PRQ+ +1 ,VMM QV- R11Xg Id.121. Id.


too much for the Court to ignore.122 However, what it did ignore, or atleast readily dismissedh np, 6PMVl9, /1MPYl Y12YV-2,g

2./!c)]6A 9aH 7Gc!-] >GH-)CHA: A Response to Kirtsaeng

It is quite plausible that producers would have exploited any new-found rights granted to them if the Court had ruled for Wiley. After all,those producers, in the name of profit-seeking, would have sought anycompetitive advantage possible even though consumers could benegatively harmed. However, that fact alone is not enough to disregardhow the Court ruling for Kirtsaeng could harm those very sameproducers. After all, profit-seeking is still a legitimate business endeavor,one deeply embedded in American culture and history.123

Without the ability to realize profits, Wiley contended that producerswould no longer be able to create new and innovative products, ascheaper, imported goods would squeeze them out of domestic markets.124A-1X)YV-, n1)MX Slose the very incentives for creativity and innovation+Qp+ !12R-V,, P2+V2XVX +1 T1,+V-g=125 This concern is one of marketsegmentation, and ostensibly it would harm both consumers andproducers.126 Without protection from cheaply-made foreign goods, thelikelihood of profit diminishes,127 and with diminishing profit comes theinability for individuals to further create goods that could be beneficial tothe public at large.128

The Court even conceded that under its rulP2Rh P+ n1)MX oV SXPTTPY)M+h/V-Qp/, P3/1,,PoMV= T1- Y1/l-PRQ+ Q1MXV-, +1 XP(PXV T1-VPR2 p2X X13V,+PYmarkets.129 However, the Court dismissed this fact by stating that it could

122. Id. p+ LJGG j21+P2R +Qp+ -VMPp2YV )/12 +QV TP-,+ ,pMV X1Y+-P2V P, ,13V+QP2R SXVV/MlV3oVXXVX= nP+QP2 +Q1,V nQ1 SQp(V -VMPVX 12 P+, /-1+VY+P12=ig123. See, e.g., Eldred v. Ashcroft, HJF :g>g LEGh KLK 2gLE jKeeJi jSt!s1/l-PRQ+ Mpn

celebrates the profit motive, recognizing that the incentive to profit from the exploitationof copyrights will redound to the public benefit by resulting in the proliferation ofN21nMVXRVg=ig124. Brief of Respondent at 46-56, Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct.

1351 (2013) (No. 11-697), 2012 WL 3836936.125. Brief for Business Software Alliance as Amicus Curiae Supporting Respondent at

5, Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013) (No. 11-697), 2012 WL3945860. See generally U.S. CONST. art. I, § 8.126. Brief for Business Software Alliance, supra note 125, at 8-12. Upon first glance,

it may seem as though consumers would only benefit from having access to cheapimported goods. However, if those same goods push out higher quality goods from themarket, consumers could only purchase poor quality (albeit cheap) goods.127. Id. at 5.128. Id. at 6.129. Kirtsaeng, 133 S. Ct. at 1370.


TP2X S21 op,PY /-P2YP/MV 1T Y1/l-PRQ+ Mpn= ,)RRV,+P2R /)oMP,QV-, Sp-Vespecially V2+P+MVX= +1 +QV -PRQ+ +1 ,VR3V2+ 3p-NV+,g130 Even if this is thecase, market segmentation, and thus profit seeking, remains an importantpolicy concern that should be considered when finding an appropriateinterpretation for the first sale doctrine.

However, the Court did not definitively speak to whether or notY1/l-PRQ+ 1n2V-, ,Q1)MX Qp(V S31-V +Qp2 1-XP2p-l Y133V-YPpM /1nV-=to segment markets.131 Instead, it left that decision to Congress.132 Andthat decision is one Congress should soon address, as some publishersQp(V pM-VpXl TVM+ +QV TpMM1)+ 1T +QV >)/-V3V !1)-+9, XVYP,P12g133

The idea of Congress supporting an amendment to the Copyright ActP, 21+ P2Y12YVP(poMV& P+ P, MPNVMl +Qp+ ,Q1-+Ml pT+V- +QV >)/-V3V !1)-+9,decision, lobbyists for the various publishing companies were clamoringT1- !12R-V,,9, Vp- P2 1-XV- +1 VTTVY+)p+V ,)YQ p YQp2RVg #XXP+P12pMMlh +QVSolicitor General, on behalf of the government, supported Wiley as anamicus.134 While it is true that the Solicitor General conceded that]P-+,pV2R9, /1MPYl Y12YV-2, nV-V Sn1-,V= +Qp2 6PMVl9,h135 that does not3Vp2 +Qp+ 6PMVl9, p-V )2P3/1-+p2+ 1- P2,PR2PTPYp2+g `2XVVXh 21n +Qp+!12R-V,, Qp, p T-p3Vn1-N T1- /-V(V2+P2R ]P-+,pV2R9, S/p-pXV 1TQ1--PoMV,h= 2p3VMl +QV >)/-V3V !1)-+9, -VYV2+ XVYP,P12h P+ ,Q1)MX amendthe first sale doctrine so that producers such as Wiley are protected aswell.

130. Id. While the Court further stated that the idea of market segmentation is intension with antitrust standards, segmentation in the copyright context is concerned withthe ability to remain competitive in domestic and foreign markets as opposed tomonopolistic price fixing. Id.131. Id. at 1371.132. Id.133. Lawrence Hurley & Jonathon Stempel, U.S. High Court Rules Against Publisher

on Copyright Protections, REUTERS (Mar. 19, 2013),http://www.reuters.com/article/2013/03/19/usa-court-copyright-idUSL1N0CB6DG20130319 jSShares of publishers fell after the decision, with McGraw-Hill Cos dropping as much as 1.7 percent in New York and Pearson Plc closing down 1.1percent in London.=ig134. See Brief for the United States as Amicus Curiae Supporting Respondent,

Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2012) (No. 11-697), 2012 WL3902599. <QV R1(V-23V2+ ,+p+VX +Qp+ ]P-+,pV2R9, P2+V-/-V+p+P12 1T ' LeDjpi n1)MXSVTTVY+P(VMl 2)MMPTlts !12R-V,,9, YMVp- /1MPYl YQ1PYV= Qp(P2R ' GeKjpijLi9, /-P3p-lfunction be protecting domestic goods from unauthorized or piratical foreign goods isS/-1+VY+P12P,+= p2X V2Y1)-pRV, 3p-NV+ ,VR3V2+p+P12g Id. at 29-31.135. Transcript of Oral Argument, supra note 104, at 51.


D. An Alternate Interpretation, a Congressional Solution

1. 2#) R!H?# >!C-=!?6A \]JC!+![)+ ^)G%CLF#!-Lc 4)L+!H%

While the Court was quite dismissive of any reading of the doctrinethat added a geographical limitation, Congress can still amend the Act toinclude such a reading. After all, even though the Court found]P-+,pV2R9, /1MPYl p-R)3V2+ .)P+V Y12(P2YP2Rh P+ MVT+ 3P+PRp+P2R 6PMVl9,concerns to Congress.136 Therefore, only the legislature can construe thefirst sale doctrine in such a way as to satisfy both parties.

c1- R)PXp2YVh !12R-V,, Yp2 +)-2 +1 +QV ZP2+Q !P-Y)P+9, hybrid halfgeographical/half non-geographical interpretation of the first saledoctrine.137 As the Supreme Court in Kirtsaeng recognized, the likelyreason for this mixed definition was a fear that, with no geographicallimitation, the copyright holder could prevent downstream commerceeven when he SR-p2+VX /V-3P,,P12 T1- +QV T1-VPR2 3p2)TpY+)-VhP3/1-+p+P12h p2X p2 P2P+PpM X13V,+PY ,pMV 1T +QV Y1/lg=138

If such a level of control existed, a publisher like Wiley would beable to manufacture its goods abroad, allow their importation into theUnited States, yet forbid the future sales of the used goods even whenthey are within the country.139 While this fear would seem to encourageat least a partially geographic reading of the first sale doctrine, theKirtsaeng Court completely disregarded the Ninth CirY)P+9, mixeddefinition; +QV !1)-+ Y1)MX TP2X 21 npl +1 S-VY12YPMV tP+s nP+Q +QVMp2R)pRV 1T +QV /Q-p,Vh ;MpnT)MMl 3pXV )2XV- +QP, +P+MVg9=140 This,+p+V3V2+ P, XVTP2P+P(Vh lV+ T-13 !12R-V,,9, /V-,/VY+P(Vh Vp,l +1disregard. After all, even though the Kirtsaeng Court used congressionalintent to justify their holding, there is also congressional intent nowXP-VY+Ml p2+P+QV+PYpM +1 +QV !1)-+9, -)MP2Rh 2p3VMl +QV /-P2YP/MV +Qp+ :g>gstatutes do not apply extraterritorially.141

This mixed definition would be the ideal path for Congress to follow,p, +QV >)/-V3V !1)-+9, 212-geographic ruling overly protects consumers

136. Kirtsaeng, 133 S. Ct. at 1371.137. See Denbicare U.S.A. Inc. v. Toys R Us, Inc., 84 F.3d 1143 (9th Cir. 1996),

abrogated by Kirtsaeng, 133 S. Ct. 1351 (construing the doctrine to cover both (1) copiesmanufactured in the United States and (2) copies manufactured abroad but first sold in+QV :2P+VX >+p+V, nP+Q +QV #3V-PYp2 Y1/l-PRQ+ 1n2V-9, /V-3P,,P12ig138. Kirtsaeng, 133 S. Ct. at 1360.139. Id.140. Id.141. Id. at 1376. This is a general and oft-cited principle. See, e.g., 4 M. NIMMER &D.

NIMMER, COPYRIGHT ' LFgeK jKeLKi jSt!s1/l-PRQ+ Mpn, X1 21+ Qp(V p2l Vm+-p+V--P+1-PpM1/V-p+P12g=i.


and a strictly geographic reading overly protects producers. Thedefinition would prevent producers from exerting unlimited downstreamcontrol over their goods by exhausting their rights after a valid domesticsale; producers would also be prevented from deliberately outsourcingmanufacturing by the first sale applying to goods made abroad with theX13V,+PY Y1/l-PRQ+ Q1MXV-9, /V-3P,,P12g142 While these aspects of thedefinition would benefit consumers, producers would be protected aswell. The first sale would not protect goods made abroad without theirpermission, so producers would not need to fear being squeezed out oftheir markets by cheaper and unauthorized foreign goods as they couldsue importers for infringement.143

The Ninth Circuit created its mixed definition because the courtthought it was the best solution for the policy issues producers andconsumers were raising. This statutory interpretation was not confined toa singular case; it evolved through a series of four distinct rulings.144Conceivably, this mixed definition offers Congress a manner in which itYp2 pXX-V,, +QV XVTPYPV2YPV, 1T +QV >)/-V3V !1)-+9, -)MP2Rh +Q1)RQ +QVSupreme Court could Qp(V pM,1 T1MM1nVX +QV ZP2+Q !P-Y)P+9, XVTP2P+P12hthus mooting the need for congressional intervention.

However, the Kirtsaeng Court found the difficulties of resolving theZP2+Q !P-Y)P+9, P2+V-/-V+p+P12 with the language of the Act morepersuasive than the potential policy advantages such a mixed definitionwould bring.145 If such a hybrid definition can truly protect bothconsumers and producers, and if such a goal is truly the intent ofCongress, Congress must act to change the language of the first saledoctrine. After all, the Supreme Court has already concretely stated itsinterpretation of the doctrine, and the only body able to overrule such aninterpretation is the legislature.

2. Another Possible Solution to the Problem

Congress has had the Ninth !P-Y)P+9, /1+V2+PpM ,1M)+P12 P2 T-12+ 1Tthem for some time, but has not yet chosen to act.146 At this point, it may

142. See infra, note 147.143. Id.144. BMG Music v. Perez, 952 F.2d 318 (9th Cir. 1991); Parfums Givenchy, Inc. v.

Drug Emporium, Inc., 38 F.3d 477 (9th Cir. 1994); Denbicare U.S.A. Inc. v. Toys R Us,Inc., 84 F.3d 1143 (9th Cir. 1996), abrogated by Kirtsaeng v. John Wiley & Sons, Inc.,133 S. Ct. 1351 (2013); Quality King Distrib.h `2Yg (g \9p2kp ?V,Vp-YQ `2+9Mgh `2Ygh HKJU.S. 135, 182 (1998); see also John Rothchild, Exhausting Extraterritoriality, 51 SANTACLARA L. REV. 1187, 1218-KH jKeLLi jYpMMP2R +QV,V Yp,V, +QV SZP2+Q !P-Y)P+ .)p-+V+=).145. Kirtsaeng, 133 S. Ct. at 1360.146. Denbicare, 84 F.3d at 1149-51.


be appropriate to examine other potential solutions to this first saleXPMV33ph p, !12R-V,,9, P2pY+P12 3pl ,/VpN +1 P+ p++V3/+P2R +1 TP2X pbetter solution to this copyright problem.

The existing law allows producers, such as shampoo manufacturers,to segment markets by releasing different products, packaging, designs,or other such items into different areas. This allows a greater amount ofprotection, as they are ostensibly different products, than goods such astextbooks. Perhaps a solutions lies in a stratification of the existingcopyright law in order to afford different levels of protection for differentgoods; in this way, goods can be protected without making one uniformand overarching rule. Accordingly, each good would receive an adequateamount of protection without it affecting how any other good is treated.

There is one large issue to this potential solution, however.Stratification may be good in theory, but it naturally causes seriousimplementation issues. As each particular good, or categories of goods,would be given a different level of protection depending on what exactlyit was, courts would not be given any sort of bright line rule. Therewould be more of an argument as to what category of goods a particularitem fit into, and this uncertainty would conceivably increase litigationY1,+, p, /p-+PV, TPRQ+ +1 Qp(V +QVP- R11X -VYVP(V +QV S/-1/V-= p31)2+ 1Tprotection they desire. This may in turn lead to further complications ascourts would have to establish balancing tests in order to be able todetermine what good belonged where. This increased complexity, andcost, would likely not be something Congress would desire.147 As such,+QV ZP2+Q !P-Y)P+9, +V,+ n1)MX p//Vp- +1 oV ,)/V-P1- +1 +QP, Y1/l-PRQ+stratification.

IV. CONCLUSION

The first sale doctrine, as stated in Bobbs-Merrill, limits thedistribution rights a copyright holder possesses.148 Under the doctrine, asubsequent purchaser can sell what they bought free and clear from anypotential action the original copyright holder may raise.149 While thisdefinition was extended in Quality King, the Court did not go far enough

147. The determining factor would likely be the amount of protection given toconsumers and producers versus the cost of implementation. True, a stratified copyrightlaw may be able to give each consumer and producer the protection they want, but atwhat cost? There likely still would be a grey area as parties argue their good fits into acertain category of protection, and as new goods are created, arguments would arise as towhere they belonged as well. This would certainly pose an undue strain on the judiciary.148. Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908).149. Id.


in defining the limits of the doctrine, thus leaving statutoryambiguities.150

If the Quality King court fully defined key phrases of the Copyright#Y+h ,/VYPTPYpMMl +QV /Q-p,V SMpnT)MMl 3pXV )2XV- +QP, +P+MVh= +QV ;Y1--VY+9interpretation could have been established much earlier.151 Both theOmega and Kirtsaeng YP-Y)P+ Y1)-+, oVMPV(VX +QV /Q-p,V +1 3Vp2 SnP+QP2+QV :2P+VX >+p+V,=; if the good were made abroad, or if the original saleoccurred abroad, the first sale doctrine does not apply.152

However, the Supreme Court, in Kirtsaeng, disagreed. The Courtruled that foreign made goods were protected by the first sale doctrine.153<QV-VT1-Vh T1- +QV >)/-V3V !1)-+h SMpnT)MMl 3pXV )2XV- +QV +P+MV=Y12+pP2, 21 RV1R-p/QPYpM MP3P+p+P12 p2X ,P3/Ml 3Vp2, 3pXV SP2pYY1-Xp2YV nP+Q +QV !1/l-PRQ+ #Y+g=154 In making this decision, the!1)-+ Vmp3P2VX p 2)3oV- 1T TpY+1-,h P2YM)XP2R ]P-+,pV2R9, S/p-pXV 1TQ1--PoMV,h= o)+ P+ XP,3P,,VX +QV P3/1-+p2YV 1T 6PMVl9, /1MPYl Y12YV-2,g155By doing so, the Court set the stage for producers like Wiley to beeconomically harmed by an influx of cheaper, foreign made goods.

To remedy this, Congress should amend the Copyright Act and thefirst sale doctrine to allow for the policy concerns of both consumers and/-1X)YV-,g `2 TpY+h P+ pM-VpXl Qp, p +V3/Mp+VC +QV ZP2+Q !P-Y)P+9, Qlo-PXhalf geographical/half non-geographical interpretation.156 It is true thatthe Kirtsaeng Court disregarded this interpretation, and its rulingabrogated the Ninth Circuit cases espousing the mixed definition, butCongress can still act and interpret its own Act as it pleases even if thataction preempts the Supreme Court. And such action may be needed, asproducers have already felt some economic harm arising from the recentdecision.157

Without congressional action, the level of harm may intensify, andol MP3P+P2R /-1X)YV-,9 3p-NV+ ,Qp-V, p2X ,+PTMP2R +QVP- poPMP+l +1 3pNV pprofit, consumers may in turn harm themselves. And while other

150. See @)pMP+l ]P2R wP,+-Pogh `2Yg (g \9p2kp ?V,Vp-YQ `2+9Mgh `2Ygh HKJ :g>g LJH(1998).151. Certainly the indecision regarding Omega and Kirtsaeng would have been

alleviated, if not entirely resolved. It is entirely possible that with more concreteguidance, the Court never would have had to hear those cases.152. See John Wiley & Sons, Inc. v. Kirtsaeng, 654 F.3d 210 (2nd Cir. 2011), C);6+,

133 S. Ct. 1351 (2013); Brief for Respondent, supra note 124, at 35-38.153. Kirtsaeng, 133 S. Ct. at 1371.154. Id. at 1358.155. Id. at 1367-71.156. Denbicare U.S.A. Inc. v. Toys R Us, Inc., 84 F.3d 1143 (9th Cir. 1996),

abrogated by Kirtsaeng, 133 S. Ct. 1351.157. See, e.g., Hurley & Stempel, supra note 133.


potential solutions may be contemplated, such as stratifying the amountof protection given depending on the type of good, ultimately no solutionwould be as effective as that which was already proposed by the NinthCircuit.

Booking It to the Supreme Court: The Evolution of the First Sale Doctrine and Kirtsaeng v. John...

Documents

Transcript of Booking It to the Supreme Court: The Evolution of the First Sale Doctrine and Kirtsaeng v. John...