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A victory for commerce? SCOTUS rules for student who bought texts abroad and sold them on eBay

The U.S. Supreme Court has sided with a former California grad student who purchased books cheaply overseas and then resold them on eBay for a profit.

The student, Supap Kirtsaeng, had contended he was protected by the first-sale doctrine, which holds that copyright owners can’t ban resales of their products. In a 6-3 decision (PDF), the U.S. Supreme Court held the doctrine protects resellers even when the goods are lawfully manufactured outside the United States.

The majority opinion by Justice Stephen G. Breyer interpreted the federal copyright statute to establish no geographic boundaries on the first-sale doctrine. But the opinion also stressed the practical problems of a contrary interpretation. “Reliance upon the ‘first sale’ doctrine is deeply embedded in the practices of those, such as booksellers, libraries, museums, and retailers, who have long relied upon its protection,” Breyer wrote.

He offered several examples. Library collections contain at least 200 million books published abroad. Goods ranging from automobiles to personal computers contain copyrightable software programs lawfully sold abroad. Retailers imported more than $2.3 trillion in in foreign goods just in 2011.

The copyright holder in the case before the court, publisher John Wiley & Sons, had argued that any threats to commerce by limiting the first-sale doctrine were purely theoretical. “We are less sanguine,” Breyer wrote.

“The fact that harm has proved limited so far may simply reflect the reluctance of copyright holders so far to assert geographically based resale rights,” Breyer said. “They may decide differently if the law is clarified in their favor. Regardless, a copyright law that can work in practice only if unenforced is not a sound copyright law. It is a law that would create uncertainty, would bring about selective enforcement, and, if widely unenforced, would breed disrespect for copyright law itself.”

Breyer was joined by Chief Justice John G. Roberts Jr. and Justices Clarence Thomas, Samuel A. Alito Jr., Sonia Sotomayor and Elena Kagan.

The court had previously considered the issue in a case involving discounted Omega watches, but split 4-4 after Justice Elena Kagan recused herself. SCOTUSblog says at its live blog that the 6-3 lineup in the present case “would suggest that someone must have seen this case differently.”

Justice Ruth Bader Ginsburg wrote a dissent joined by Justice Anthony M. Kennedy and partly joined by Justice Antonin Scalia. Ginsburg argued that the majority opinion is at odds with Congress’ aim to protect copyright owners against the unauthorized importation of low-priced, foreign-­made copies of their copyrighted works. “The court’s parade of horribles,” she wrote, “is largely imaginary.”

The case is Kirtsaeng v. John Wiley & Sons.

The decision is a loss for John Wiley & Sons, which had obtained a $600,000 lower court judgment against Kirtsaeng for resellings its textbooks. Wiley president and CEO Stephen Smith issued a statement expressing disappointment. The decision “is a loss for the U.S. economy, and students and authors in the U.S. and around the world,” he said. Smith also expressed thanks for organizations that filed briefs supporting his company’s position, including the American Bar Association.

Prior coverage:

ABAJournal.com: “ABA Amicus Brief Sides with Textbook Publisher in Infringement Suit over eBay Resales”

ABAJournal.com: “Supreme Court Grants Cert in Copyright Case Involving EBay Sales of Texts Bought Overseas”

Updated at 2 p.m. to include statement by Stephen Smith.