Tuesday, March 19, 2013

The Wiley Copyright Case Reaction

As you probably know, the case regarding re-importation into the US of books sold in another country which was brought by John Wiley & Sons against a Thai 'importer' was lost today when the Supreme Court decided to overturn the lower courts ruling in favor of Wiley. Instead, in a 6-3 decision the court sided with the defendant (Kirtsaeng).

The Wiley statement in response is terse but here is the AAP statement in reaction to the case:
Washington, DC; March 19, 2013 — The following statement was released today by Tom Allen, President and CEO, the Association of American Publishers, in response to the Supreme Court’s decision in Kirtsaeng v. John Wiley & Sons, Inc:

“We are disappointed that today’s copyright decision by the US Supreme Court ignores broader issues critical to America’s ability to compete in the global marketplace. To quote Justice Ginsburg’s dissenting opinion, the divided ruling is a ‘bold departure’ from Congress’ intention ‘to protect copyright owners against the unauthorized importation of low-priced, foreign made copies of their copyrighted works’ that is made ‘more stunning’ by its conflict with current US trade policy.

“The Court’s ruling on a narrow question of statutory construction revealed diverse views among the Justices on whether Congress, in enacting the importation prohibitions, intended to facilitate the ability of publishers and other US copyright owners to segment their foreign and domestic markets with different pricing strategies in order to compete effectively in global trade.

“The decision will have significant ramifications for Americans who produce the books, music, movies and other content consumed avidly around the world. The Court’s interpretation of the ‘first sale’ provision of US copyright law will discourage the active export of US copyrighted works. It will also reduce the ability of educators and students in foreign countries to have access to US-produced educational materials, widely considered the world’s gold standard.

“Despite their differences, all of the Justices acknowledged the increasingly critical importance of foreign markets to the well-being of the US economy and that the impact of US copyright law on the development and growth of American participation in global trade is ultimately a matter for Congress to decide. AAP expects that Congress will likely consider whether the impact of the Court’s divided ruling on the ability of US producers to effectively compete in global markets requires legislative clarification. AAP will be prepared to participate on behalf of publishers in whatever process Congress undertakes to consider and address these issues.”
Other reaction:

Publishers Weekly

Statement from John Wiley & Sons Inc.

Libraries appear excited:  This from the The Library Copyright Alliance (LCA) which consists of three major library associations — the American Library Association, the Association of Research Libraries, and the Association of College and Research Libraries:
Today the US Supreme Court announced its much anticipated decision in Kirtsaeng v. Wiley a lawsuit regarding the bedrock principle of the “first sale doctrine.”The 6-3opinion is a total victory for libraries and our users. It vindicates the foundational principle of the first sale doctrine—if you bought it, you own it. All who believe in that principle, and the certainty it provides to libraries and many other parts of our culture and economy, should join us in applauding the Court for correcting the legal ambiguity that led to this case in the first place. It is especially gratifying that Justice Breyer’s majority opinion focused on the considerable harm that the Second Circuit’s opinion would have caused libraries.

Selections from the opinion on FindLaw:
Wiley filed suit, claiming that Kirtsaeng's unauthorized importation and resale of its books was an infringement of Wiley's §106(3) exclusive right to distribute and §602's import prohibition. Kirtsaeng replied that because his books were "lawfully made" and acquired legitimately, §109(a)'s "first sale" doctrine permitted importation and resale without Wiley's further permission. The District Court held that Kirtsaeng could not assert this defense because the doctrine does not apply to goods manufactured abroad. The jury then found that Kirtsaeng had willfully infringed Wiley's American copyrights and assessed damages. The Second Circuit affirmed, concluding that §109(a)'s "lawfully made under this title" language indicated that the "first sale" doctrine does not apply to copies of American copyrighted works manufactured abroad.
Section 109(a) says nothing about geography. "Under" can logically mean "in accordance with." And a nongeographical interpretation provides each word in the phrase "lawfully made under this title" with a distinct purpose: "lawfully made" suggests an effort to distinguish copies that were made lawfully from those that were not, and "under this title" sets forth the standard of "lawful[ness]" (i.e., the U. S. Copyright Act). This simple reading promotes the traditional copyright objective of combatting piracy and makes word-by-word linguistic sense.

In contrast, the geographical interpretation bristles with linguistic difficulties. Wiley first reads "under" to mean "in conformance with the Copyright Act where the Copyright Act is applicable." Wiley then argues that the Act "is applicable" only in the United States. However, neither "under" nor any other word in "lawfully made under this title" means "where." Nor can a geographical limitation be read into the word "applicable." The fact that the Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad does not mean the Act is inapplicable to copies made abroad. Indeed, §602(a)(2) makes foreign-printed pirated copies subject to the Copyright Act. And §104 says that works "subject to protection" include unpublished works "without regard to the [author's] nationality or domicile," and works "first published" in any of the nearly 180 nations that have signed a copyright treaty with the
United States. Pp. 8-12.
A nongeographical interpretation is also supported by other provisions of the present statute. For example, the "manufacturing clause," which limited importation of many copies printed outside the United States, was phased out in an effort to equalize treatment of copies made in America and copies made abroad. But that "equal treatment" principle is difficult to square with a geographical interpretation that would grant an American copyright holder permanent control over the American distribution chain in respect to copies printed abroad but not those printed in America. Finally, the Court normally presumes that the words "lawfully made under this title" carry the same meaning when they appear in different but related sections, and it is unlikely that Congress would have intended the consequences produced by a geographical interpretation.
But the law has not been settled for so long in Wiley's favor. The Second Circuit in this case was the first Court of Appeals to adopt a purely geographical interpretation. Reliance on the "first sale" doctrine is also deeply embedded in the practices of booksellers, libraries, museums, and retailers, who have long relied on its protection. And the fact that harm has proved limited so far may simply reflect the reluctance of copyright holders to assert geographically based resale rights. Thus, the practical problems described by petitioner and his amici are too serious, extensive, and likely to come about to be dismissed as insignificant--particularly in light of the ever-growing importance of foreign trade to America.

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