Cornell Student's Used Textbook Business Stirred Up A Game-Changing Copyright Battle

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The U.S. Supreme Court is set to rule this term on a battle over international copyright law that some legal experts call the most important case of its kind in a decade.Former Cornell student Supap Kirtsaeng is at the centre of the fight over whether it’s OK for people in the United States to sell copyrighted materials that were made abroad.

Kirtsaeng, a Thai national, had his family members buy cheap textbooks in Thailand and ship them to the U.S. so he could then sell them for a profit on eBay. He reportedly sold $1 million worth of books, though the exact profits from the venture are in dispute.

In any event, John Wiley & Sons Inc., whose Asian unit made the books, was arguably losing money off Kirtsaeng’s ingenuity because it missed out on the chance to sell those textbooks itself in the more expensive U.S. market.

To try to recoup some of that cash and possibly make a point, the publisher used a quirk of American copyright law to successfully sue Kirtsaeng over his lucrative side business. It won $600,000 in damages.

Under the “first-sale” doctrine of U.S. copyright law, consumers who legally buy a copy of a copyrighted work – such as a book or CD – can do whatever they want with it.

But John Wiley successfully argued at trial that the “first-sale” doctrine didn’t apply to works made outside the U.S. because a sale outside America shouldn’t be governed by its copyright law.

Now that the Supreme Court has heard the case, it’s going to issue an opinion this term on whether the “first-sale” doctrine applies to goods made outside the U.S.

It’s a decision that could have huge implications for global companies that make copyrighted products like textbooks, intellectual property lawyer Garland Stephens told Business Insider.

“If I want to authorise Thailand to sell my copyrighted books, and I charge much less for people who sell that book in the U.S.,” he said, “it pretty much destroys my ability to charge different prices in different markets.”

The counter-point of course is that people should be able to do whatever they want with the stuff they buy. Consumer groups like the Owners’ Rights Initiative have argued that a loss for Kirtsaeng would seriously curtail your ability to sell foreign-made stuff on e-Bay, Etsy, and other sites.

In reality, it’s hard to imagine big companies going after every little guy who tries to sell a CD or textbook on eBay, Stephens says. But big copyright owners might try to make an example out of a few folks if the Supreme Court decision goes their way, he added.

Just look at the recording industry and the massive awards it got from a few illegal file-sharers.

“They have picked out a few and really gone after them,” Stephens said.

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