In a long-awaited opinion issued on Aug. 15, 2011, the U.S. Court of Appeals for the Second Circuit held in John Wiley & Sons v. Kirtsaeng,1 that goods manufactured abroad and imported into the United States without authorization from the copyright owner cannot qualify for the “first sale” defense. This defense, codified in §109(a) of the U.S. Copyright Act,2 limits the copyright owner’s exclusive distribution right, provided in §106(3) of the act, by entitling the owner of copies of a work to sell or otherwise dispose of those copies without authorization from the copyright owner. Thus, although the copyright owner retains all other exclusive rights in the work, such as the rights to make copies and to prepare derivative works under §§106(1) and (2), once a sale or other transfer of particular copies of a work has been made, the copyright owner has exhausted his exclusive §106(3) distribution right with respect to those copies.
Application of §109(a) is straightforward with respect to domestically manufactured goods which are first sold in the United States. When a U.S. publisher and copyright owner of textbooks manufactured in Texas sells 100 copies to a bookstore in Austin, the proprietor of that bookstore is free to sell the books without any control by the copyright owner. But what if the books were manufactured in England under license from the U.S. publisher and then sold to a British textbook distributor who exported them to the United States? At this point, the U.S. publisher would assert its exclusive importation right set forth in §602(a) of the act, which provides that importation of copies of a copyrighted work without authority of the copyright owner infringes the owner’s exclusive distribution right under §106(3).
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