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Summary:

The Supreme Court sided with a student textbook seller agains the publisher John Wiley in a major dispute over who can resell copyrighted works.

U.S. Supreme Court
photo: flickr / dbking

In a court ruling that has major implications for used good merchants across the country, the Supreme Court overturned a lower court decision that forbid a textbook seller from reselling textbooks that he had purchased overseas.

In a 6-3 ruling, the court rejected publisher John Wiley’s interpretation of a rule known as the “first sale doctrine” which prevents copyright owners from exerting rights over a product once it has been purchased legally. This rule is what allows used book and music stores to sell used items without the copyright owners’ permission.

In recent years, copyright owners facing a wave of imported good have argued that “first sale” only applies to goods manufactured in the United States. Lower courts have till now sided with the copyright owners, producing considerable uncertainty about whether or not retailers can import and sell goods they legally purchase abroad.

Writing for the majority, Justice Stephen Breyer rejected John Wiley’s argument that the phrase “lawfully made under this act” implied a geographic limitation. He also cited the concerns of library associations, used-book dealers, technology companies, consumer-goods retailers, and museums — all of which had urged the court to reject the restricted notion of “first sale.”

Wiley CEO Stephen Smith expressed disappointment with the ruling, saying in a statement: “It is a loss for the U.S. economy, and students and authors in the U.S. and around the world.”

The John Wiley ruling comes three years after the Supreme Court failed to resolve the same issue in a dispute between watch maker Omega and the retailer Costco. In that case, Omega had put little pictures on its watches and then argued that Coscto infringed on its copyright when it imported them; that case produced a 4-4 tie which meant the lower ruling against Costco was upheld. The result was different this time with different judges on the bench.

The ruling is likely to be a relief for used booksellers and others who feared that geographical limits on first sale would harm their business. In the case before the Supreme Court, the defendant was a college student who had arranged for his family in Asia to buy textbooks and mail them to him in America where he sold them at a profit.

Justices Ginsburg, Kennedy and Scalia dissented from the ruling. To learn more about the first sale doctrine, read our background on the Wiley case here.

This story was updated at 3:30pm with a statement from Wiley’s CEO.

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  1. Good, if you buy books, records, dvd’s etc… you should be able to resale them. In short a used market should be allowed to exist.

  2. Yay, one of the very few wins for owner rights in a long time. How about a few more?

  3. The unspoken aspect of this case is the fact that the publishers/creators/etc. who are fighting against importation, are mainly concerned because they engage in heavy price discrimination around the world.

    Imagine a textbook selling for $100 in the US…but $10 in India (because that is all the Indian market will support).

    A used Indian textbook (identical in everything but price) costing $5 could be imported into the US – and compete against that $100 travesty.

    *That* is the arbitrage the publishers were fighting against.

    Imagine this applied to Big Pharma…(obviously used drugs – ewww – aren’t possible *but* identical drugs *are* sold for hugely different prices around the world…)

  4. Who is the loser in this ruling? I think it could be students in developing countries. Not sure, but I think the reason the student could buy books at a low price and sell them at a high price is because publishers offer low cost editions at low prices in developing countries . I expect their profit margin in such places is lower. With this ruling, might they decide not to publish those low priced editions/low cost editions?

    What are those students then supposed to do? If the products are priced the same around the world there is no business model that this student saw available to him. But if a universal price is targeted for us in Europe and in the Americas, I worry about what will happen to students in poorer countries.

  5. “Wiley CEO Stephen Smith expressed disappointment with the ruling, saying in a statement: ‘It is a loss for *our ability to gouge* students and authors in the U.S. and around the world.’”

    FTFY

  6. Dennis J. Tuchler Wednesday, March 20, 2013

    Will this spill over to the world of agricultural and other gene patents

  7. I wonder if this will result in more defamation, slander, etc., lawsuits after books are sold in countries where the publisher never intended them to be resold.

  8. It’s another blow against publishers, who have a hard enough time making a profit. Students (and many others) seem to think that it doesn’t cost the publisher anything to produce a book. But anyone involved in publishing (including authors) knows how much time and how much money goes into producing a book. Rights for photos are sky high; permissions for reproduced text items are also sky high. Paper costs a fortune. Color printing is very expensive. You can cheer these imports all you like, but the authors are losing royalties and the publishers will lose even more of their slim profit margin. If the book is dying, it’s because of rulings like this. Eventually, publishers will be forced to sell only ebooks, and maybe not those for very long.

    1. Read the case law here. The publisher was legally publishing this book in a foreign country. Therefore we assume the publisher was paying the paper costs, printing costs, copyrights, etc. and selling the book for a lot less in that foreign country. So either the publisher is gouging the American public or the American public is subsidizing the foreign market. Either way it is a lot less fair to the American public than it is to poor ole John Wiley and sons. I have no sympathy and your attempt to generate sympathy is lost on me.

  9. Vandy L Parks Friday, April 5, 2013

    Most publisher have worked around the used text book market. A Good Example, they leave out a chapter or two out of the book and then you must buy a code to gain access to those chapters online. The books then become worthless to resellers, unless they are unused and the code would be valid. Having been a used bookseller for years now, I have made this mistake a couple times — buying used textbooks where the code for the online chapters have already been used. Publishers can cry foul play, but they are smart enough to work around it.

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