Upholding the first sale doctrine
The case in question starts with Supap Kirtsaeng, who figured out that he could buy textbooks in Thailand for resale in the US. Those books are sold much more cheaply in Thailand, offering a classic opportunity for arbitrage and a quick profit. The publisher of those books, John Wiley & Sons, sued, claiming that importing those books into the US was a violation of its copyright, despite the fact that the books had been legitimately published and sold in Thailand with Wiley's permission. Kirtsaeng responded that the books, like most copyrighted materials, were covered by the first sale doctrine; once Wiley had sold the books, it had exhausted its right to control their fate.
Wiley's interesting claim in this case was that first sale does not apply to items that are manufactured outside of the US. Appeals courts in the US agreed with this position, but the Supreme Court did not. Its conclusion (by a 6-3 ruling) was that the place of manufacture and sale was not relevant to copyright law and that the import and resale of the books was a legal activity. So, for now, the first sale doctrine lives and cannot be eliminated simply by manufacturing an object abroad.
This ruling matters for a couple of reasons. One is that software, too, is covered by copyright law, and it is often included in products manufactured all over the world. Copyright law is often used in an attempt to control what can be done with a larger product; the implications of eliminating first-sale rights on products with important copyrightable components could open the door to no end of possible horrors. Consider, for example, the following text from the decision:
The logic that applies to a car also applies to just about any sort of electronic gadget that one can imagine — contemporary cars, after all, can be thought of as rather heavy electronic entertainment systems with self-propulsion capabilities and a problematic carbon footprint. It is a rare device indeed that doesn't contain copyrightable pieces imported from somewhere; the thought that all of those devices remain under the control of the copyright holder is discouraging at best. This ruling does not eliminate that threat (see below), but it mitigates it somewhat.
Copyright law is often employed for the protection of business models. Over 100 years ago, music publishers claimed that player pianos were a threat to their existence and a violation of their copyrights; the attempts to use copyright to keep business models alive have continued ever since. So it is refreshing to see the Supreme Court state that there is no inherent right to protection for a specific business model:
We still live in a world where publishers feel entitled to exactly such rights: the use of the CSS encryption scheme (and associated legal battles) to divide the DVD market is an obvious example. Perhaps it is optimistic to hope that a statement from the highest court in the US that such rights do not inherently adhere to a specific business model will improve the situation. But, then, your editor tends toward optimism.
That said, there is plenty of space for pessimism as well; the upholding of first sale does not make our copyright-related problems magically vanish. Much of the industry appears to be headed in directions where first sale does not seem to apply — electronic books being an obvious example. The use of DRM schemes to restrict first-sale rights continues, and other aspects of copyright law (such as the DMCA in the US) support that use. The DMCA also remains useful for companies trying to restrict what the "owner" of a device can do with it; the debate over jailbreaking is one example. Online or "cloud-based" resources are subject to no end of restrictions of their own.
And so on.
But, then, nobody ever said that the fight for freedom would be easy. One
Supreme Court victory is not going to change that situation. But it is an
important affirmation that copyright is meant to be a limited right
and not a means for absolute control by copyright holders. Those of us who
are users of copyrighted materials (i.e. all of us) have some rights too.