WASHINGTON (Reuters) - The Supreme Court on Tuesday said U.S. copyright holders cannot block the resale inside the country of products they make elsewhere, a major case affecting the annual importation of tens of billions of dollars of gray market goods.
By a 6-3 vote, the country’s highest court said the “first sale doctrine” applies to copies of a copyrighted work lawfully made abroad.
The decision will provide support for the $63 billion gray market, in which third parties import brand-name goods protected by trademark or copyright into the United States.
The case arose after Supap Kirtsaeng, a Thai national who studied math at Cornell University and the University of Southern California, helped pay for his education by reselling textbooks through eBay Inc’s website that family and friends had bought in Thailand and shipped to him.
Eight textbooks came from an Asian unit of John Wiley & Sons Inc, which sued Kirtsaeng for copyright infringement and won a $600,000 damages award from a federal jury.
The 2nd U.S. Circuit Court of Appeals in New York upheld the award in August 2011, saying foreign copies can never be resold in the United States without permission of copyright owners. The Supreme Court ruling overturns the 2nd Circuit.
But Kirtsaeng said the “first-sale” doctrine of copyright law protected him and other owners of “lawfully made” copies who sell them without the copyright owners’ permission.
Justice Stephen Breyer wrote the majority opinion. The court was not split along ideological lines, with Justice Ruth Bader Ginsburg, a liberal, writing a dissenting opinion in which she was joined by Justice Elena Kagan, another liberal, and the conservative Justice Samuel Alito.
The case is Kirtsaeng v. John Wiley & Sons Inc, U.S. Supreme Court, No. 11-697.
Reporting by Lawrence Hurley; Editing by Howard Goller and Eric Beech