Copyright exhaustion in the US: what the Kirtsaeng and ReDigi decisions tell us about the future of the first sale doctrine and secondary markets for copyrighted goods

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The concept of copyright ‘exhaustion’, or the ‘first sale’ doctrine, refers to the principle that once a copyright owner places a copyrighted item in the stream of commerce by selling it, they have exhausted their exclusive statutory right to control its distribution. This issue has recently moved to the forefront of American copyright law in the wake of two recent decisions: Kirtsaeng v John Wiley & Sons, Inc and Capital Records v ReDigi. Together, the two cases highlight an increasing need for Congress to update the Copyright Act in order to keep pace with rapidly evolving digital media and an increasingly global economy.

Kirtsaeng v Wiley -

Supap Kirtsaeng was a graduate student from Thailand who moved to the US in order to study Mathematics. After realising that publishers sold foreign editions of textbooks significantly cheaper than US versions, he arranged for his family in Thailand to purchase textbooks from local bookstores and send them to him in the US, where he sold them for profit. One of the publishers, John Wiley & Sons, sued Kirtsaeng for copyright infringement, alleging that his actions violated the company’s exclusive right to import and distribute its copyrighted textbooks. In a surprise six-to-three decision, the US Supreme Court sided with Kirtsaeng and held for the first time that the importation and sale of copyrighted works lawfully acquired abroad is protected by the first sale doctrine. The Court explained that given the increasing amount of foreign trade to the US, allowing copyright owners to control downstream sales of all copyrighted goods manufactured or sold abroad could potentially wreak havoc on established secondary markets for books, movies, cars, electronics and other copyrighted works of art...

Originally published in the NORTH AMERICAN REGIONAL FORUM NEWS - SEPTEMBER 2013.

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