The Supreme Court’s Small (But Helpful) Step Towards Copyright Sanity

The Court’s opinion in the Kirtsaeng v. John Wiley case, which came out on Tuesday, has some interesting fodder for those looking for glimpses of how copyright law is evolving these days.  The case centered on a hyper-technical question involving three interlocking statutory sections in the Copyright Act (I blogged about it in some detail here and won’t repeat that earlier dissection of the complicated statutory issues) with some quite significant real-world implications.

The basic question was this:  can Mr. Kirtsaeng purchase a copy of a John Wiley textbook that was lawfully manufactured (i.e., with the permission of the copyright owner) overseas, bring that copy into the United States, and re-sell it?  Copyright law clearly permits you to re-sell lawfully-manufactured books purchased here in the United States.  It also (thanks to the Court’s decision in the Quality King case a few years ago) permits you to re-sell books that you may have purchased overseas but which were manufactured here in the US.  The question here was whether re-sale right (the so-called “first sale doctrine”) applies to copies purchased and manufactured overseas and imported into the US.

Wiley argued that it didn’t – that the Copyright Act, which gives the re-sale right (in sec. 109(a)) only to the “owners of copies lawfully made under this title,” (i.e., Title 17 of the US Code, the US Copyright Act) imposes a geographical restriction on the re-sale right.  Copies are “lawfully made under this title,” Wiley argued, if they are “made in territories in which the Copyright Act is law” (i.e., the United States).

The Court – in a utterly brilliant opinion by Justice Breyer, a minor classic of the “here are all the reasons why my arguments are better than yours” school of opinion-writing — rejected Wiley’s argument and refused to impose the geographical restriction Wiley sought.

The language of §109(a) read literally favors [a] nongeographical interpretation, namely, that “lawfullymade under this title” means made “in accordance with” or “in compliance with” the Copyright Act. The language of §109(a) says nothing about geography. The word “under” can mean “[i]n accordance with.” 18 Oxford English Dictionary 950 (2d ed. 1989). See also Black’s Law Dictionary 1525 (6th ed. 1990) (“according to”). And a nongeographical interpretation provides each word of the five-wordphrase with a distinct purpose. The first two words of the phrase, “lawfully made,” suggest an effort to distinguishthose copies that were made lawfully from those that werenot, and the last three words, “under this title,” set forth the standard of “lawful[ness].” Thus, the nongeographical reading is simple, it promotes a traditional copyright objective (combatting piracy), and it makes word-by-word linguistic sense.

“The geographical interpretation, however, bristles with linguistic difficulties” – which the opinion then proceeds to catalogue with considerable scrupulousness.  It’s something of a tour de force – well worth reading, though I suspect that 33 pages construing 5 words in the Copyright Act will only appeal to hardened copyright aficianodos or the hopelessly insane).  It is chock full of nice turns of phrase; for instance, confronted with dictum from an earlier Supreme Court case which appeared to suggest that Wiley’s reading was the correct one, Breyer writes:

We cannot, however, give the [earlier] statement the legal weight for which Wiley argues. The language“lawfully made under this title” was not at issue in [the earlier case]; the point before us now was not then fully argued; we did not canvas the considerations we have here set forth; we there said nothing to suggest that the example assumes a “first sale”; and we there hedged our statement with the word “presumably.” Most importantly, the statement is pure dictum. It is dictum contained in a rebuttal to a counterargument. And it is unnecessary dictum even in that respect. Is the Court having once written dicta calling a tomato a vegetable bound to deny that it is a fruit forever after?

It is entirely persuasive, to my eye, as a matter of statutory construction.  [Indeed, I'll go out on a limb here and suggest that it may be one of those rare opinions that ends up having swayed a vote.  In 2010, the Court was presented with precisely the same issue as here in the Omega v. Costco case; Justice Kagan recused herself from that one for some reason, and the Court split 4-4.  With the same issue in front if it, and with Kagan now participating, it ends up 6-3.  Somebody switched from the copyright owner's side (Omega/Wiley) to the re-seller's side (Costco/Kirtsaeng), and I would not be at all surprised to learn that it was because Breyer's opinion actually made sense).

Moreover, it is better copyright policy.  As I wrote in my earlier posting, the rule Wiley argued for would have given publishers a substantial incentive to move all of their manufacturing facilities (for books, and CDs, and DVDs and . . .) overseas, because they would only be able to prevent arbitrage, and maintain their price discrimination and market segmentation, with respect to those foreign-manufactured copies.  It is hard to believe -- impossible, actually -- that Congress intended that result.

And perhaps most importantly of all, it also takes what I think is the correct interpretive stance with respect to construing ambiguities (of which there are many) in the Copyright Act:  When in doubt, construe the statute to favor the public interest (in low-cost informational goods, and wide dissemination of creative works) over the parochial interest of the copyright holders.  It's a kind of anti-monopoly presumption; Congress, of course, can adjust the balance if it wishes, but where it hasn't spoken clearly (and it is very difficult for me to imagine a place where it has spoken less clearly than here), choose that reading of the statute that yields the greatest public benefit, not the one that gives copyright holders the broadest rights.  Justice Breyer is becoming (here, but also in his dissenting opinion in Eldred v Ashcroft, and his concurring opinion in MGM v. Grokster) the heir to Justice Stevens' (and, before him, Justices Black's and Justice Douglas') position as spokesman for this strong anti-monopolist presumption:

[Copyright involves] a balance of competing claims upon the public interest:  Creative work is to be encouraged and rewarded, but private motivation must ultimately serve the cause of promoting broad public availability of literature, music, and the other arts.  The immediate effect of our copyright law is to secure a fair return for an author’s’ creative labor.  But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good. . . . The sole interest of the United States lies not in authorial reward, but in the general benefits derived by the public from the labor of authors,” . . . and when [the statute's] literal terms [are] ambiguous, the Copyright Act must be construed in light of this basic purpose.”  Sony v. Universal Pictures (Stevens, J)

We will, I’m quite certain, need a strong advocate for the public benefit in the years ahead, and it’s good to see Breyer assuming the mantle.