"First sale" is the legal doctrine which says that copyright holders in the United States only have the right to control the "first sale" of a physical book, magazine, DVD, etc., and that they have no right to control what you, the buyer, do with it after you buy it. Once you've purchased it, as far as the law is concerned, you can keep it on a shelf, sell it, rent it out (like Netflix/Blockbuster), loan it to your friends or to the general public (like a library), or give it away to Goodwill, your cousin Timmy, or some random person on the street. This is not considered to infringe on the copyright holder's legal monopoly over their intellectual property because they are deemed to have received their just profit from the "first sale" of the item. There are a few things the buyer can't do, such as make additional copies and distribute them, or put on shows for the general public. But as long as there's only one copy and it's only being used for private reading or viewing, it's all good, no matter how many people may have owned it and read it or viewed it serially.

Without this rule, it would be impossible for libraries, secondhand bookstores, or video-rental businesses to exist. Copyright holders could ban secondhand sales, rental, or even private borrowing or gifting of their products by asserting that such activities infringed on their protected monopoly over the sale of their intellectual property.

The case at hand involves an international college student, Supap Kirtsaeng, who noticed that the very same textbooks were simultaneously being sold cheap in Thailand while they were exorbitantly expensive in US college bookstores. Being an enterprising fellow, he started buying them cheap in Thailand and selling them at a profit to other students in the US.

John Wiley & Co., the publisher involved in this case, mischieviously parses the structure of a sentence in the US copyright law in order to assert that "first sale" only applies to items manufactured in the United States, not to items lawfully manufactured in other countries. Therefore, says Wiley, buyers of books/DVDs/etc. manufactured overseas are guilty of copyright infringement if they resell those items in the US.

Wiley's immediate goal appears to be to defend their ability to price-discriminate between customers in different countries, price-gouging US college students with exorbitant textbook prices while selling the same books much more cheaply in overseas markets, and prohibit small-business entrepreneurs like Mr. Kirtsaeng from arbitraging the difference between the two. (You know, just like big companies are prohibited from arbitraging the difference between wage levels in different countries, using cheap overseas workers to make products which are then sold in the US at high prices made possible only by the higher US wage scale. Oh, wait. They aren't?)

Beyond that rather ugly goal looms an even uglier potential precedent. A ruling for Wiley in this case could establish, instead of a single standard of law, a two-tiered system in which publishers are given preferential legal treatment, and the ability to prohibit secondhand sale or rental of their products, if they manufacture them outside the US.

The predictable result would be to prompt publishers to outsource production of physical books and other media, killing US manufacturing jobs, in order to get the preferential legal status which would allow them to outlaw secondhand sale, rental or borrowing of those products. This in turn would jack up prices and reduce selection for US customers who would no longer have the options to buy those products secondhand, rent them, or borrow them from a library. Nor would customers be able to acquire a legal copy, at any price, of a book or DVD that was not marketed in the US, such as the many movies and TV shows from England, Japan, and other foreign countries that are never given an official US release. This would also, obviously, wreak havoc on libraries, secondhand book and video sellers, video rental businesses, and all of their customers and users.

Is the world "flat" only when it boosts the profit margins of large companies? Or is the global marketplace also "flat" when it allows individuals to get a better price on something they need, or to buy something which is not readily available in their home country?

Let's just hope that at least five Justices aren't wholly owned by the media companies and are able to see how radical and unwise such a change in US copyright law would be.

No time right now to hunt down lots o' links other than the Supreme Court links at the top, but a quick Google News search for (Kirtsaeng AND Wiley) should bring up lots of food for thought for the interested reader.