The Second Circuit Court of Appeals recently upheld a lower court decision finding that the 'First Sale' doctrine in the US copyright law - the provision that enables libraries to lend and consumers to re-sell books they have lawfully purchased - does not apply to works manufactured outside the US. The verdict has reportedly put librarians' and book re-sellers' core activities now in question.
The publishing industry has long fought the 'illegal importation of foreign works,' especially textbooks. While the verdict is seen to stand as a major victory for the publishing industry, critics say the decision could harm libraries and encourage outsourcing of jobs.
The ruling comes in the case of John Wiley & Sons, Inc. v. Supap Kirtsaeng, in which Kirtsaeng, a Thai-born US student, was accused of importing and re-selling foreign editions of textbooks, made for exclusive sale abroad, in the US market via eBay. In its verdict, a three-judge panel of the Second Circuit affirmed by a 2-1 margin that Kirtsaeng 'could not avail himself of the first sale doctrine,' because language in the statute says that products must be 'lawfully made.'
According to a report published in the Publishers Weekly, the court ruled that the words 'lawfully made' limits First Sale 'specifically and exclusively to works that are made in territories in which the Copyright Act is law, and not to foreign-manufactured works.'
The verdict is the second decision in a year to limit the First Sale doctrine. In December 2010, the Supreme Court deadlocked 4-4 in the case of Costco Wholesale Corporation v. Omega, SA, the net effect of which was to affirm a Ninth Circuit Court of Appeals decision that enjoined big-box store Costco from selling copyrighted, foreign-made Omega watches, authorised for sale only in foreign territories, in the US market. Because the Supreme Court deadlocked, however, the Ninth Circuit ruling is non-binding on other circuits. The Second Circuit ruling, observers say, goes further than the Omega decision, and could upend decades of common practice for libraries and used booksellers.
According to experts, the ruling creates uncertainty and gives publishers yet another potential element of control when it comes to library usage, and at a time when the shift to licensed access of e-books is already impacting the ability of libraries to purchase and lend content.
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