Supreme Court OKs Discounted Resale Of 'Gray Market' Goods
ROBERT SIEGEL, HOST:
The Supreme Court issued a big ruling today. It said U.S. companies that make and sell goods overseas cannot prevent those items from being imported back here by you or me and resold at a discount. Instead of the black market, it's called the gray market, and U.S. companies don't like it because they don't get a dime of the profits.
The 6-3 decision is likely worth billions, even trillions, of dollars, and it could have repercussions that extend from trade policy to yard sales. NPR legal affairs correspondent Nina Totenberg reports.
NINA TOTENBERG, BYLINE: Supap Kirtsaeng, a mathematics student from Thailand, discovered that some of his U.S. textbooks were published in Asia and sold for a lot less money there. They were identical to the books he used at Cornell and the University of Southern California, except that they were much cheaper and bore an inscription saying they could not be exported. He got his friends and family in Asia to send him lots and lots of the books, sold them on eBay and made about a $100,000 profit.
Needless to say, the publisher of the textbooks, Wiley & Sons, didn't like that one bit. It sued Kirtsaeng for copyright infringement and won. Kirtsaeng was ordered to pay $600,000 in damages. The lower courts ruled that he'd violated the federal copyright law by importing the books without the permission of the publisher and copyright owner. Kirtsaeng appealed to the U.S. Supreme Court, contending that he was protected under something called the first-sale doctrine, which says that once you buy a product, it's yours to do with as you please.
Today, he won. Writing for the six-justice majority, Justice Stephen Breyer said that to impose geographic limits on copyright protection would make no sense. He said automobiles, calculators, microwaves, tablets, personal computers, all contain copyrighted software programs or packaging and many of these products are made abroad with the U.S. copyrighters' permission.
To forbid their importation without permission from the copyright owner would in essence mean that a car owner, whose GPS or radio or carburetor was made abroad, could not sell his vehicle without the copyright owner's permission. Therefore, said the court, goods, once sold lawfully, whether in the U.S. or elsewhere, can now be sold in the U.S. without the permission of the copyright holder. Nina Totenberg, NPR News, Washington. Transcript provided by NPR, Copyright NPR.