The Supreme Court has ruled that copyright owners cannot legally forbid people who buy their works to sell them in the US, even if the items in question were made outside the US. The decision upheld a geographically unlimited first sale doctrine — a provision which holds that once someone buys a book, DVD, or other work copyrighted in America, they're free to sell or rent it without the copyright holder's permission. In doing so, it created a major precedent for breaking down international sale barriers, granting legal status both to people who simply want to sell items bought abroad and to those who make money by taking advantage of cheap prices outside the US.
The case was based on a lawsuit by a textbook publisher, John Wiley & Sons. The company produced textbooks both in the US and abroad, often for cheaper prices in developing countries. Thai citizen Supap Kirtsaeng used this price gap to help pay his expenses at Cornell University: he asked friends and family to buy cheap textbooks back home, then had them shipped to the US and sold them, undercutting the American prices. Though Wiley argued that it had specifically prohibited selling the books in the US, Kirtsaeng's lawyer argued that once someone had bought the book, Wiley's claim on them was exhausted no matter where they were produced — essentially, first sale rights exist for American copyrights no matter where the goods are actually made.
"Without that permission a foreign car owner could not sell his or her used car."
The Supreme Court agreed in a 6-3 decision, saying that previous cases didn't support limiting the first sale doctrine by geography. Furthermore, their questions exposed a wide range of potential implications: while companies may benefit from being able to adjust prices based on local cost of living, being unable to sell a copyrighted work abroad without explicit permission could limit libraries from purchasing books or prevent people from selling anything that was made abroad and includes some form of copyrighted software.
"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," said Justice Breyer in a majority statement. "Yet there is no reason to believe that foreign auto manufacturers regularly obtain this kind of permission from their software component suppliers... Without that permission a foreign car owner could not sell his or her used car."
"A geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities."
The Supreme Court determined that Congress could pass a law explicitly giving copyright holders other rights beyond the first sale doctrine to help keep country-based pricing in place. So far, though, it concluded that copyright law doesn't apply in this case, as long as the original copy was produced lawfully (i.e. not pirated.) In some cases, other laws could stop international sales: selling used software, for example, can be prohibited in licensing agreements. Overall, though, it's a resounding affirmation of an expansive first sale doctrine. "We... doubt that Congress would have intended to create the practical copyright-related harms," Breyer writes, "with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities."