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Supreme Court ruling puts first sale front and center

This has been a heckuva month on the copyright front. Two weeks ago the White House came out in favor of permitting consumers to hack their cell phones, raising major questions about the DMCA. Then came a major speech by the U.S. Register of Copyrights Maria Pallante teeing up a major overhaul of the Copyright Act. And on Tuesday the Supreme Court handed down a decision in Kirtsaeng v. John Wiley & Sons that could turn the debate over the first-sale doctrine on its ear.

There’s a lot to unpack from Tuesday’s 6–3 ruling by the court, which held that books printed overseas for sale in foreign territories can legally be resold in the U.S. without the copyright owner’s permission. But it’s unlikely to be the last word on the subject of the first-sale doctrine.

The ruling creates a major headache for rights owners. By allowing copies of books, movie discs, video games, and CDs purchased in low-cost territories to be resold in the U.S., the ruling puts at risk the long-standing practice of licensing rights on a territory-by-territory basis, a point conceded by Justice Stephen Breyer in his opinion for the majority.

“Wiley and the dissent claim that a nongeographical interpretation [of the first sale doctrine] will make it difficult, perhaps impossible, for publishers (and other copyright holders) 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 geographic 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.”

Rights-owner groups are unlikely simply to leave it at that, however. There will certainly be pressure to go to Congress to try to amend the law to limit the scope of the first-sale doctrine to copies produced in the U.S. Any effort to reopen the first-sale doctrine, however, will inevitably bleed over into the debate over whether it does or should apply to digital copies as much as to physical copies.

That debate is one most rights owners would probably prefer to avoid. But given the stakes involved in territorial licensing, media companies may feel they have no choice but to open that can of worms.