On March 19th, the Supreme Court decided the case of Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351 (2013). In Kirtsaeng, the Court made a definitive statement on the global reach of exhaustion, under the "first-sale" doctrine, of a copyright owner's distribution right in lawfully transferred copies of a copyrighted work. The decision has implications for many industries and may portend the ultimate revision of the comparable "first-sale" doctrine under U.S. patent law. This article describes the first-sale doctrine as applied to copyright, analyzes the Kirtsaeng decision, and provides observations regarding its potential implications.
The First-Sale Doctrine
The U.S. Copyright Act grants a copyright owner certain exclusive rights, including the right to distribute copies by sale or other transfer of ownership. 17 U.S.C. § 106(3). But while these exclusive rights are extensive, they are not limitless. Section 109(a), for one, sets forth the "first sale" doctrine:
"Notwithstanding the provisions of section 106(3), the owner of a particular copy . . . lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy."
In effect, section 109(a) exhausts the distribution right by permitting the owner of a particular copy of a copyrighted work to dispose of that copy as he or she wishes. Notably, however, the first-sale doctrine is itself qualified. By its terms, section 109(a) applies only to copies "lawfully made under this title." That this language applies to copyrighted works made and distributed in the United States is clear enough. A more difficult question is to what extent the first-sale doctrine applies to legitimate works (i.e., copies made with the copyright owner's permission) produced and/or acquired abroad.