Supreme Court Backs Student in Dispute Over Used Textbook Sales

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Stephen Breyer wrote the majority opinion.

The millions of Americans who sell used items on eBay and at garage sales, flea markets or church raffles got a big victory Tuesday in the U.S. Supreme Court.

The court ruled that copyrighted items made overseas—and that includes not only books but also CDs, DVDs, computers, watches and anything else with copyrighted material in it—are covered by a federal law that says a person who buys such a product is free to turn around and sell it.

The ruling came in a case involving Supap Kirtsaeng, a student from Thailand who was surprised by the high cost of academic textbooks when he arrived in the U.S. to attend college. He asked his parents to search bookstores back home and send him much cheaper English language versions—published overseas and sold at a fraction of the price—of the same texts.

He was soon running what amounted to a small business out of his apartment, helping to pay his way through school by selling textbooks on eBay. The exact amount of his profit is unclear, but court records say it was around $100,000.

The publisher of some of the books he sold, John Wiley & Sons, sued him in federal court, and a New York jury ordered him in 2009 to pay $600,000 in damages. When he said he had nowhere near that kind of money, he had to hand over personal property, including his computer, printer and golf clubs. A federal appeals court upheld the verdict.

A law known as the the first-sale doctrine says if you buy the latest novel, you can then sell it on a website or give it away to the church library without violating copyright laws. A who's who of companies and groups involved in selling used merchandise had urged the Supreme Court to rule that the doctrine applied to goods made overseas.

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Goodwill had warned of "catastrophic" consequences on the secondary market.

The court ruled 6-3 that it does. The opinion, written by Justice Stephen Breyer, said that's what Congress intended and that's what the law has long been understood to mean.

"Reliance upon the 'first sale' doctrine is deeply embedded in the practices of those, such as booksellers, libraries, museums, and retailers, who have long relied upon its protection," Breyer wrote.

A contrary ruling, he said, "would prevent the resale of, say, a car, without the permission of the holder of each piece of copyrighted automobile software."

EBay warned that a ruling in favor of the publisher would have been a blow to "trade, consumers, secondary markets, e-commerce, small businesses and jobs." Goodwill Industries said such an outcome would have had "a catastrophic effect on the viability of the secondary market and, consequently, on Goodwill's ability to provide needed community-based services."

"There are enough copyright owners out there—and enough crazy copyright lawsuits," said a group of book store operators in a friend of court brief. "No one should be put to the choice of violating the law and hoping they don't get caught, and losing their business."

The Software & Information Industry Association (SIIA), the principal trade association for the software and digital content industries, said it was is strongly disappointed with the Supreme Court's ruling.

"The ruling for Kirtsaeng will send a tremor through the publishing industries, harming both U.S. businesses and consumers around the world," SIIA General Counsel Keith Kupferschmid said in a statement. "Today's decision will create a strong disincentive for publishers to market different versions and sell copies at different prices in different regions. The practical result may very well be that consumers and students abroad will see dramatic price increases or entirely lose their access to valuable U.S. resources created specifically for them."