“A publisher may find it more difficult to charge different prices for the same book in different geographical markets.” —Breyer, Justice 

Facts: Section 109 of the Copyright Act sets forth the “first sale” doctrine, which stipulates that a party who lawfully acquires a copyrighted work may, without the authority of the copyright holder, sell or otherwise dispose of the work. Supap Kirtsaeng, a citizen of Thailand, moved to the United States where he earned an undergraduate degree at Cornell University and a Ph.D. degree from the University of Southern California. Kirtsaeng returned to Thailand to teach. While he was in the United States, Kirtsaeng had friends and family buy foreign editions of English language textbooks in Thailand at Thai book shops, where the books were sold at low prices, and mail the books to him in the United States. Kirtsaeng sold these textbooks in the United States at higher prices, and kept the profits. John Wiley & Sons, Inc., publishes textbooks in the United States. It assigns to its wholly owned subsidiary, John Wiley & Sons (Asia) Pte Ltd. (Wiley Asia), rights to publish and sell these same English language textbooks abroad. Each copy of Wiley Asia foreign editions contains a restriction stating that the copy is to be sold only in a particular country or geographical region outside the United States. Kirtsaeng purchased textbooks in Thailand that were published and sold by Wiley Asia and resold them in the United States, in violation of Wiley’s restriction. Wiley brought suit in U.S. district court against Kirtsaeng for copyright infringement. The jury found Kirtsaeng liable and assessed statutory damages of $600,000. The U.S. court of appeals affirmed the decision. Kirtsaeng appealed to the U.S. Supreme Court. 

Issue Does the “first sale” doctrine permit a party to purchase foreign editions of English language textbooks abroad and resell them in the United States? 

Language of the U.S. Supreme Court: The upshot is that there are two essentially equivalent versions of a Wiley textbook, each version manufactured and sold with Wiley’s permission: (1) an American version printed and sold in the United States, and (2) a foreign version manufactured and sold abroad. Wiley claims that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographical markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights. 

Decision: The U.S. Supreme Court held that the “first sale” doctrine applied and that Kirtsaeng’s conduct did not violate copyright law. The Supreme Court reversed the decision of the U.S. court of appeals. 

Ethics Questions: Was it ethical for Wiley to divide the textbook sales by geographical area? Did Kirtsaeng act ethically in this case?