On October 29, the Supreme Court will hear a case that could dramatically alter the way Goodwill® stores across the United States handle the resale of donated copyrighted materials. The case, Kirtsaeng v. John Wiley & Sons, Inc., is on appeal from the 2nd Circuit Court and will highlight the conflict between the First-Sale Doctrine and U.S. copyright laws as they relate to imported goods.
First-Sale Doctrine holds that the first purchaser of a copyrighted item “owns” the item and may dispose of it without the copyright holder’s permission. Because of this doctrine, the owner of a copyrighted item can donate that item to Goodwill and Goodwill can resell the item without being sued for copyright infringement.
The issue before the court relates to items produced and sold outside the United States with the copyrighter’s permission, then resold in the United States by a purchaser. Why does this issue create such a conflict today? Because the 2nd Circuit’s broad holding could essentially gut First-Sale Doctrine since most manufacturing today occurs outside the U.S.
What could it mean for Goodwill if the Supreme Court holds for the publisher? It could mean that each donated copyrighted item received by a Goodwill would have to be checked to ensure that it was not brought into the U.S. after sale. If it was, and a Goodwill sold the item, that Goodwill could be prosecuted under U.S. copyright law.
What might the Supreme Court do? The court could rule that First-Sale Doctrine applies even in the case of imported items. The catch? A phrase in the U.S. copyright law, “…lawfully made under this Title…” seems to exclude items from overseas since they were not produced and sold under U,S. copyright law. The court might narrowly apply their ruling to books since those were the items at issue in Kirtsaeng.
Goodwill is participating in the Owners’ Rights Initiative, a coalition that includes eBay, New Egg, Overstock.com, Sotheby’s, Retail Industry Leaders Association (RILA), Target and the Consumer Electronics Association. In addition, Goodwill has filed an amicus brief supporting the petitioner in case, Supap Kirtsaeng, asking the court to hold in favor of the petitioner.
Regardless of how the court rules, we expect the issue will be taken to Congress and the fight will continue.
