22 March 2013

US Supreme Court rules on infringement in case of lawful importation

In its decision dated 19-3-2013 the US Supreme court granted relief to a student who had arranged for certain textbooks to be purchased in Thailand and shipped to him and had later sold the same within the United States [Kirtsaeng, DBA Bluechristine v. John Wiley & Sons, Inc]. On the lines of the recent Delhi High Court decision which upheld the principle on international exhaustion in India, at issue before the US Court was the question of infringement of the rights of the copyright owner in the US.


Scope of ‘First Sale’ doctrine

The US company argued that the student had imported the goods (sold at low prices in Thailand) without authorisation and resale within the US amounted to infringement. However, the appellant claimed to be within the limits of law in that the books had been lawfully made in Thailand (by the respondent’s subsidiary) and legitimately acquired by his family/friends. The ‘First sale’ doctrine, as it is called entitles the owner of a lawfully made copy to sell or oth­erwise dispose of the possession of that copy without the permission of the copyright owner.

The Supreme Court agreed that placing a geographical limit on the protection under statute would be incorrect. Such an interpretation would give an American copyright holder permanent control over the American distribution chain in respect to copies printed abroad but not those printed in America. The Court opined that the phrase ‘lawfully made under this title’ [Section 109(a) of the USC] did not mean that protection under the first sale doctrine would be available only to copies made in the US. 


Pirated copies v. lawfully made copies

Stressing on the traditional copyright objective of combating piracy, the Court also stated that a geographical limitation cannot be placed on the word where the Act is ‘applicable’. The protection to a rightholder under the US copyright Act would extend to foreign printed pirated copies. In the instant case, the copies had been lawfully made by the assignee in Thailand.

The dissenting minority objected to the reading of the statute in support of international exhaustion stating that copyright owners would not have protection against unauthorized importation of low-priced, foreign-made copies of their copyrighted works. Referring to the legislative history and the position adopted by the US in international trade negotiations, the dissenting opinion states that the copyright law in US seeks to protect against piracy in two forms - both copies made without authorisation as well as those lawfully made but imported without authorisation.

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