Today the US Supreme Court issued its much anticipated
opinion in Kirtsaeng concerning application of the first sale doctrine. Ms. Rosati at the IPKAT website has covered
the opinion here. I found a couple of
portions of the opinion very interesting (although it will take some time to
digest all of the opinions fully). The
first part concerns part of the Supreme Court’s use and analysis of some of the
amicus briefs. The second part concerns
its analysis of the issue in the case in relation to the US Constitution’s
Progress clause. Here is the first part:
The “first sale” doctrine is a common-law doctrine with an
impeccable historic pedigree. In the early 17th century Lord Coke explained the
common law’s refusal to permit restraints on the alienation of chattels.
Referring to Littleton, who wrote in the 15th century, Gray, Two Contributions
to Coke Studies, 72 U. Chi. L. Rev. 1127, 1135 (2005), Lord Coke wrote:
“[If] a man be possessed of . . . a horse, or of any other chattell
. . . and give or sell his whole interest . . .therein upon condition that the
Donee or Vendee shall not alien[ate] the same, the [condition] is voi[d],
because his whole interest . . . is out of him, so as he hath no possibilit[y]
of a Reverter, and it is against Trade and Traffi[c], and bargaining and
contracting betwee[n] man and man: and it is within the reason of our Author
that it should ouster him of all power given to him.” 1 E. Coke, Institutes of
the Laws of England §360, p. 223 (1628).
A law that permits a copyright holder to control the resale
or other disposition of a chattel once sold is simi- larly “against Trade and
Traffi[c], and bargaining and con- tracting.” Ibid.
With these last few words, Coke emphasizes the importance of
leaving buyers of goods free to compete with each other when reselling or
otherwise disposing of those goods. American law too has generally thought that
competition, including freedom to resell, can work to the advantage of the
consumer. See, e.g., Leegin Creative Leather Products, Inc. v. PSKS,
Inc., 551 U. S. 877, 886 (2007) (restraints with “manifestly
anticompetitive effects” are per se illegal; others are subject to the
rule of reason (internal quotation marks omitted)); 1 P. Areeda & H.Hovenkamp,
Antitrust Law ¶100, p. 4 (3d ed. 2006) (“[T]he principal objective of antitrust
policy is to maximize consumer welfare by encouraging firms to behave
competitively”).
The “first sale” doctrine also frees courts from the
administrative burden of trying to enforce restrictions upon
difficult-to-trace, readily movable goods. And it avoids the selective
enforcement inherent in any such effort. Thus, it is not surprising that for at
least a century the “first sale”doctrine has played an important role in
American copyright law. See Bobbs-Merrill Co. v. Straus, 210 U.
S. 339 (1908); Copyright Act of 1909, §41, 35 Stat. 1084. ...
Used-book dealers tell us that, from the time when Benjamin
Franklin and Thomas Jefferson built commercial and personal libraries of
foreign books, American readers have bought used books published and printed
abroad. Brief for Powell’s Books Inc. et al. as Amici Curiae 7 (citing
M. Stern, Antiquarian Bookselling in theUnited States (1985)). The dealers say
that they have “operat[ed] . . . for centuries” under the assumption that the
“first sale” doctrine applies. Brief for Powell’s Books 7. But under a
geographical interpretation a contemporary 21 Cite as: 568 U. S. ____ (2013). .
. . The dealers say that they have “operat[ed] . . . for centuries” under the
assumption that the “first sale” doctrine applies. Brief for Powell’s Books 7.
But under a geographical interpretation a contemporary 21 Cite as: 568 U. S.
____ (2013) tourist who buys, say, at Shakespeare and Co. (in Paris), a dozen
copies of a foreign book for American friends might find that she had violated
the copyright law. The usedbook dealers cannot easily predict what the foreign
copyright holder may think about a reader’s effort to sell a used copy of a
novel. And they believe that a geographical interpretation will injure a large
portion of the used-book business.
Technology companies tell us that “automobiles, microwaves,
calculators, mobile phones, tablets, and personalcomputers” contain
copyrightable software programs or packaging. Brief for Public Knowledge et al.
as Amici Curiae 10. See also Brief for Association of Service and
Computer Dealers International, Inc., et al. as Amici Curiae 2. Many of
these items are made abroad with the American copyright holder’s permission and
then sold and imported (with that permission) to the United States. Brief for
Retail Litigation Center, Inc., et al. as Amici Curiae 4. A geographical
interpretation would prevent the resale of, say, a car, without the permission
of the holder of each copyright on each piece of copyrighted automobile software.
Yet there is no reason to believe that foreign auto manufacturers regularly
obtain this kind of permission from their software component suppliers, and
Wiley did not indicate to the contrary when asked. See Tr. of Oral Arg. 29–30.
Without that permission a foreign car owner could not sell his or her used car.
Retailers tell us that over $2.3 trillion worth of foreign
goods were imported in 2011. Brief for Retail Litigation Center 8. American
retailers buy many of these goods after a first sale abroad. Id., at 12.
And, many of these items bear, carry, or contain copyrighted “packaging, logos,
labels, and product inserts and instructions for [the use of] everyday packaged
goods from floor cleaners and health and beauty products to breakfast cereals.”
Id., at 10–11. The retailers add that American sales of more traditional
copyrighted works, “such as books, recorded music, motion pictures, and
magazines” likely amount toover $220 billion. Id., at 9. See also id.,
at 10 (electronic game industry is $16 billion). A geographical
interpretation would subject many, if not all, of them to the disruptive impact
of the threat of infringement suits. Id., at 12.
Art museum directors ask us to consider their efforts to
display foreign-produced works by, say, Cy Twombly, René Magritte, Henri
Matisse, Pablo Picasso, and others. See supra, at 10 (describing how
§104 often makes such works “subject to” American copyright protection). A
geographical interpretation, they say, would require the museums to obtain
permission from the copyright owners beforethey could display the work, see supra,
at 15—even if the copyright owner has already sold or donated the work toa
foreign museum. Brief for Association of Art Museum Directors et al. as Amici
Curiae 10–11. What are the museums to do, they ask, if the artist retained
the copyright, if the artist cannot be found, or if a group of heirs is arguing
about who owns which copyright? Id., at 14.
These examples, and others previously mentioned, help explain
why Lord Coke considered the “first sale” doctrine necessary to protect
“Trade and Traffi[c], and bargaining and contracting,” and they help explain why
American copyright law has long applied that doctrine. Cf. supra, at
17–18.
The second interesting part contains language that may spawn a hundred
law review articles by interested parties:
The Constitution
describes the nature of American copyright law by providing Congress with the
power to“secur[e]” to “[a]uthors” “for limited [t]imes” the “exclusive
[r]ight to their . . . [w]ritings.” Art. I, §8, cl. 8. The Founders,
too, discussed the need to grant an author a limitedright to exclude
competition. Compare Letter from Thomas Jefferson to James Madison (July 31,
1788), in 13Papers of Thomas Jefferson 440, 442–443 (J. Boyd ed. 1956)(arguing
against any monopoly) with Letter from James Madison to Thomas Jefferson (Oct.
17, 1788), in 14 id., at 16, 21 (J. Boyd ed. 1958) (arguing for a
limited monopoly to secure production). But the Constitution’s language nowhere
suggests that its limited exclusive right should include a right to divide
markets or a concomitant right to charge different purchasers different prices
for the same book, say to increase or to maximize gain. Neither, to our
knowledge, did any Founder make any such suggestion. We have found no precedent
suggesting a legal preference for interpretations of copyright statutes that
would provide for market divisions. Cf. Copyright Law Revision, pt. 2, at
194 (statement of Barbara Ringer, Copyright Office) (division of territorial
markets was “primarily a matter of private contract”). [EMPHASIS ADDED BY
BLOGGER]
To the contrary,
Congress enacted a copyright law that (through the “first sale” doctrine)
limits copyright holders’ability to divide domestic markets. And that
limitation is consistent with antitrust laws that ordinarily forbid market
divisions. Cf. Palmer v. BRG of Ga., Inc., 498 U. S. 46, 49–50
(1990) (per curiam) (“[A]greements between competitors to allocate
territories to minimize competition are illegal”). Whether copyright owners
should, or should not, have more than ordinary commercial power to divide
international markets is a matter for Congress to decide. We do no more here
than try to determine what decision Congress has taken.
So, here is the extra-special
language again: “But the Constitution’s language nowhere suggests that its
limited exclusive right should include a right to divide markets or a
concomitant right to charge different purchasers different prices for the same book,
say to increase or to maximize gain.” Yikes!
(Monsanto Sweating?)
