Wednesday, March 20, 2013

Kirtsaeng v. John Wiley & Sons, Inc., Copyrights and American Imports: U.S. Supreme Court Upholds First Sale Doctrine as Applicable to Copyrighted Works Lawfully Made Abroad

Kirtsaeng v. John Wiley & Sons, Inc. , 568 U.S. ____ (2013), a U.S. Supreme Court case decided March 19, 2013, involves a fundamental international copyright law issue holding that in the United States, the "first sale" doctrine applies to copies of a copyrighted work lawfully made abroad [marketing-oriented differential pricing notwithstanding], a court decision which means that such works can be imported into the United States without violating American copyright laws.

Justice Breyer, regarded by many to be the most intellectual of the U.S. Supreme Court Justices, wrote the majority opinion, and that opinion is a pleasure to read in substantiating the innate conservatism, tradition and history that inheres in "the law" and gives it substance and duration, as opposed to politics and current events, whose impact is more day-to-day.

Breyer wrote inter alia as follows on centuries-old common law, a common law that builds the foundation for the "first sale" doctrine, a specific limitation to copyrights, which is everywhere essential to commerce, not just in the USA but throughout the commercial, business world on our planet:
"A relevant canon of statutory interpretation favors a nongeographical reading. “[W]hen a statute covers an issue previously governed by the common law,” we must presume that “Congress intended to retain the substance of the common law.” Samantar v. Yousuf, 560 U. S. ___, ___, n. 13 (2010) (slip op., at 14, n. 13). See also Isbrandtsen Co. v. Johnson, 343 U. S. 779, 783 (1952) (“Statutes which invade the common law . . . are to be read with a presumption favoring the retention of long established and familiar principles, except when a statutory purpose to the contrary is evident”).

The “first sale” doctrine is a common-law doctrine with an impeccable historic pedigree. In the early 17th century Lord Coke explained the common law’s refusal to permit restraints on the alienation of chattels. Referring to Littleton, who wrote in the 15th century, Gray, Two Contributions to Coke Studies, 72 U. Chi. L. Rev. 1127, 1135 (2005), Lord Coke wrote:
“[If] a man be possessed of . . . a horse, or of any other chattell . . . and give or sell his whole interest . . . therein upon condition that the Donee or Vendee shall not alien[ate] the same, the [condition] is voi[d], because his whole interest . . . is out of him, so as he hath no possibilit[y] of a Reverter, and it is against Trade and Traffi[c], and bargaining and contracting betwee[n] man and man: and it is within the reason of our Author that it should ouster him of all power given to him.” 1 E. Coke, Institutes of the Laws of England §360, p. 223 (1628).
A law that permits a copyright holder to control the resale or other disposition of a chattel once sold is similarly “against Trade and Traffi[c], and bargaining and contracting.” Ibid.

With these last few words, Coke emphasizes the importance of leaving buyers of goods free to compete with each other when reselling or otherwise disposing of those goods. American law too has generally thought that competition, including freedom to resell, can work to the advantage of the consumer. See, e.g. Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U. S. 877, 886 (2007) (restraints with “manifestly anticompetitive effects” are per se illegal; others are subject to the rule of reason (internal quotation marks omitted)); 1 P. Areeda & H. Hovenkamp, Antitrust Law ¶100, p. 4 (3d ed. 2006) (“[T]he principal objective of antitrust policy is to maximize consumer welfare by encouraging firms to behave competitively”).

The “first sale” doctrine also frees courts from the administrative burden of trying to enforce restrictions upon difficult-to-trace, readily movable goods. And it avoids the selective enforcement inherent in any such effort. Thus, it is not surprising that for at least a century the “first sale” doctrine has played an important role in American copyright law. See Bobbs-Merrill Co. v. Straus, 210 U. S. 339 (1908); Copyright Act of 1909, §41, 35 Stat. 1084. See also Copyright Law Revision, Further Discussions and Comments on Preliminary Draft for Revised U. S. Copyright Law, 88th Cong., 2d Sess., pt. 4, p. 212 (Comm. Print 1964) (Irwin Karp of Authors’ League of America expressing concern for “the very basic concept of copyright law that, once you’ve sold a copy legally, you can’t restrict its resale”).
The common-law doctrine makes no geographical distinctions; nor can we find any in Bobbs-Merrill (where this Court first applied the “first sale” doctrine) or in §109(a)’s predecessor provision, which Congress enacted a year later. See supra, at 12. Rather, as the Solicitor General acknowledges, “a straightforward application of Bobbs-Merrill” would not preclude the “first sale” defense from applying to authorized copies made overseas. Brief for United States 27. And we can find no language, context, purpose, or history that would rebut a “straightforward application” of that doctrine here.

The dissent argues that another principle of statutory interpretation works against our reading, and points out that elsewhere in the statute Congress used different words to express something like the non-geographical reading we adopt. Post, at 8–9 (quoting §602(a)(2) (prohibiting the importation of copies “the making of which either constituted an infringement of copyright, or which would have constituted an infringement of copyright if this title had been applicable” (emphasis deleted))). Hence, Congress, the dissent believes, must have meant §109(a)’s different language to mean something different (such as the dissent’s own geographical interpretation of §109(a)). We are not aware, however, of any canon of interpretation that forbids interpreting different words used in different parts of the same statute to mean roughly the same thing. Regardless, were there such a canon, the dissent’s interpretation of §109(a) would also violate it. That is because Congress elsewhere in the 1976 Act included the words “manufactured in the United States or Canada,” 90 Stat. 2588, which express just about the same geographical thought that the dissent reads into §109(a)’s very different language. "
The majority -- Chief Justice Roberts and Justices Kagan, Sotomayor, Breyer, Thomas and Alito -- were thus right on the law, so, our opinion.

"Justice Ginsburg filed a dissenting opinion in which Justice Kennedy joined, and in which Justice Scalia joined except as to Parts III and V–B–1." SCOTUSblog at Kirtsaeng v. John Wiley & Sons, Inc.

Justice Ginsburg, who wrote the dissent here, seems to have gotten wrapped up in the convoluted ripples of her own previous dicta, citing to herself in the Quality King case ( Quality King Distributors Inc., v. L'anza Research International Inc., 523 U.S. 135 (1998), as "GINSBURG, J., concurring"), a case summarized at the Wikipedia as follows:
"In 1998 the U.S. Supreme Court in Quality King v. L'Anza found that first-sale doctrine applied to imported goods at least where the imported goods are first lawfully made in the United States, shipped abroad for resale, and later reenter the United States. That case involved importation of hair care products bearing copyrighted labels. A unanimous Supreme Court found that the first-sale doctrine does apply to importation into the US of copyrighted works (the labels), which were made in the US and then exported."
To that unanimous decision in Quality King Distributors Inc., v. L'anza Research International Inc., 523 U.S. 135 (1998), Ginsburg wrote the sole concurring opinion representing her view (as dicta) in short as follows:
"This case involves a “round trip” journey, travel of the copies in question from the United States to places abroad, then back again. I join the Court’s opinion recognizing that we do not today resolve cases in which the allegedly infringing imports were manufactured abroad. See W. Patry, Copyright Law and Practice 166—170 (1997 Supp.) (commenting that provisions of Title 17 do not apply extraterritorially unless expressly so stated, hence the words “lawfully made under this title” in the “first sale” provision, 17 U.S.C. § 109(a), must mean “lawfully made in the United States”); see generally P. Goldstein, Copyright §16.0, pp. 16:1—16:2 (2d ed. 1998) (“Copyright protection is territorial. The rights granted by the United States Copyright Act extend no farther than the nation’s borders.”)."
It was thus her "personal opinion" and not precedential law that the phrase "lawfully made under this title" as found in the "first sale" provision "must mean" "lawfully made in the United States".

The title does not say that, and so the majority in Kirtsaeng found.

Accordingly, Justice Ginsburg's dissent in Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. ____ (2013) is best viewed as a "personal" justification for her concurring opinion of 14 years ago.

One could even agree with her that copyright law may be largely "territorial", as she claims, but that was not really the precise legal issue in Kirtsaeng, since the competing first sale doctrine is not territorial, but is rather an essential element of daily commerce around the world and an essential limitation on copyrights.

As for the other dissenters....let us recapitulate....

"Justice Ginsburg filed a dissenting opinion in which Justice Kennedy joined, and in which Justice Scalia joined except as to Parts III and V–B–1." SCOTUSblog at Kirtsaeng v. John Wiley & Sons, Inc. [emphasis added]

Justice Scalia seems to place less importance on following the common law or general precedents of law, so his concurrence here is perhaps no surprise, although we thought him to be more practical than writing concurrences "in part". How on EARTH, Justice Scalia, are lower courts or anyone else to "follow" that kind of legal "fracking"? Law should not be "hair-splitting" at the ultimate decision-making level. Courts must be clear in their opinions and views, so that citizens can follow judicial dictates. A judge who writes that he agrees with points a, c, d, f, g, m, and q but disagrees with b, e, h, i, j, k, l, n, o, and p, really helps no one, so what is the point of doing that?

Justice Kennedy in the past year or so since his losing stance on Obamacare remains an enigma. We have no idea what led him in Kirtsaeng to take a position so distant from "centrist pragmatics". Had the dissent prevailed in this case, it would have led to a nullification of the first sale rule for any imports having any relation to copyrights and would have led to an unimaginable chaos in the commercial world  -- as many copyrighted products, also in the tech sector, would have found themselves "banned" from import pending judicial decisions. Such a legal state of affairs can not be permitted.
  
As for the concurrences:

"Justice Kagan filed a concurring opinion in which Justice Alito joined." SCOTUSblog at Kirtsaeng v. John Wiley & Sons, Inc.

Justice Kagan's concurrence can be summarized in her concluding statement -- surely correct -- that:
"If Congress thinks copyright owners need greater power to restrict importation and thus divide markets, a ready solution is at hand--not the one John Wiley offers in this case, but the one the Court rejected in Quality King."
For the first time in our pages, we loudly applaud
Justice Thomas and Justice Alito.
Thank you for this decision.

Gentlemen, hope springs eternal, also in law.  It gives us a reason to look forward to coming decisions of the U.S. Supreme Court in anticipation that LAW will prevail over politics and overcome personal preferences, opinions, and/or doctrines. "There oughta be a law", and there is.

For a background on this case, see our previous postings at
A Landmark Case in Intellectual Property Law Coming Up at the U.S. Supreme Court: Copyrights, Property Ownership, Differential Pricing and the First Sale Doctrine in Law and Capitalism
and
New York Times Editorial on Imported Works and Special Copyrights Raises Issues: We Ask Whether Protective Tariffs are Gone, But Long Live Import Bans Based on Alleged Intellectual Property Rights?


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