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The U.S. Supreme Court has
granted cert in order to decide an issue of great importance to
all businesses involved in manufacturing and distributing products
throughout the world, particularly those involved in
retailing and importation, namely, whether foreign made works
intended for sale outside the U.S., in which the copyright is owned
by a U.S. entity, may be purchased outside the U.S., imported into
the U.S., and then resold or otherwise disposed of in the
U.S. without the copyright owner's authorization.
At issue is the scope of the "first sale"
doctrine. This doctrine
allows "the owner of a particular copy [of a copyrighted
work]...lawfully made under "the US Copyright Act to resell
the copyrighted work without the permission of the copyright owner.
For example, someone who owns a particular piece of artwork which
is protected by copyright is permitted to sell that piece of
artwork without getting the permission of the owner of the
copyright in the work to do so. In the case to be decided, a U.S.
book publisher's textbooks manufactured and meant for sale in
Asia were purchased in Asia, shipped into the U.S., and resold in
the U.S. The content of the books was the same but the materials
used in the manufacturing process were of different quality.
Both the U.S. District Courtand the U.S.
Federal Court of Appeals which considered the case found
that the first sale doctrine did not apply to works manufactured
outside the U.S. It is now up to the Supreme Court to make the
final determination on this issue, which will resolve a split among
U.S. Federal Courts of Appeal regarding the territorial reach of
this doctrine.
The Court previously had the opportunity to decide this issue in
2010 in
Costco Wholesale Corp v. Omega S.A. case, but the recusal of
Justice Kagan from that case resulted in a 4-4 split opinion,
which automatically affirmed the appellate court's
decision without opinion.
Stay tuned.
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