KIRTSAENG, DBA BLUECHRISTINE99 v. JOHN WILEY & SONS, INC.
No. 11-697
SUPREME COURT OF THE UNITED STATES
Decided March 19, 2013
568 U.S. 519
Argued October 29, 2012
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
KIRTSAENG, DBA BLUECHRISTINE99 v. JOHN WILEY & SONS, INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
No. 11-697. Argued October 29, 2012-Decided March 19, 2013
Respondent, John Wiley & Sons, Inc., an academic textbook publisher, often assigns to its wholly owned foreign subsidiary (Wiley Asia) rights to publish, print, and sell foreign editions of Wiley‘s English language textbooks abroad. Wiley Asia‘s books state that they are not to be taken (without permission) into the United States. When petitioner Kirtsaeng moved from Thailand to the United States to study mathematics, he asked friends and family to buy foreign edition English-language textbooks in Thai book shops, where they sold at low prices, and to mail them to him in the United States. He then sold the books, reimbursed his family and friends, and kept the profit.
Wiley filed suit, claiming that Kirtsaeng‘s unauthorized importation and resale of its books was an infringement of Wiley‘s
Held: The “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad. Pp. 7-33.
(a) Wiley reads “lawfully made under this title” to impose a geographical limitation that prevents
(b) Section 109(a)‘s language, its context, and the “first sale” doctrine‘s common-law history favor Kirtsaeng‘s reading. Pp. 8-24.
(1) Section 109(a) says nothing about geography. “Under” can logically mean “in accordance with.” And a nongeographical
In contrast, the geographical interpretation bristles with linguistic difficulties. Wiley first reads “under” to mean “in conformance with the Copyright Act where the Copyright Act is applicable.” Wiley then argues that the Act “is applicable” only in the United States. However, neither “under” nor any other word in “lawfully made under this title” means “where.” Nor can a geographical limitation be read into the word “applicable.” The fact that the Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad does not mean the Act is inapplicable to copies made abroad. Indeed,
(2) Both historical and contemporary statutory context indicate that Congress did not have geography in mind when writing the present version of
(3) A nongeographical reading is also supported by the canon of statutory interpretation that “when a statute covers an issue previously governed by the common law,” it is presumed that “Congress intended to retain the substance of the common law.” Samantar v. Yousuf, 560 U. S. 305. The common-law “first sale” doctrine, which has an impeccable historic pedigree, makes no geographical distinctions. Nor can such distinctions be found in Bobbs-Merrill Co. v. Straus, 210 U. S. 339, where this Court first applied the “first sale” doctrine, or in
(c) Several additional arguments that Wiley and the dissent make in support of a geographical interpretation are unpersuasive. Pp. 24-33.
654 F. 3d 210, reversed and remanded.
BREYER, J., delivered the opinion of the Court, in which ROBERTS, C. J., and THOMAS, ALITO, SOTOMAYOR, and KAGAN, JJ., joined. KAGAN, J., filed a concurring opinion, in which ALITO, J., joined. GINSBURG, J., filed a dissenting opinion, in which KENNEDY, J., joined, and in which SCALIA, J., joined except as to Parts III and V-B-1.
SUPAP KIRTSAENG, DBA BLUECHRISTINE99, PETITIONER v. JOHN WILEY & SONS, INC.
No. 11-697
SUPREME COURT OF THE UNITED STATES
March 19, 2013
568 U.S. 519
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 11-697
SUPAP KIRTSAENG, DBA BLUECHRISTINE99, PETITIONER v. JOHN WILEY & SONS, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
[March 19, 2013]
JUSTICE BREYER delivered the opinion of the Court.
Section 106 of the Copyright Act grants “the owner of copyright under this title” certain “exclusive rights,” including the right “to distribute copies . . . of the copyrighted work to the public by sale or other transfer of ownership.”
Section 109(a) sets forth the “first sale” doctrine as follows:
“Notwithstanding the provisions of section 106(3) [the section that grants the owner exclusive distribution rights], the
owner of a particular copy or phonorecord lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” (Emphasis added.)
Thus, even though
What, however, if the copy of Herzog was printed abroad and then initially sold with the copyright owner‘s permission? Does the “first sale” doctrine still apply? Is the buyer, like the buyer of a domestically manufactured copy, free to bring the copy into the United States and dispose of it as he or she wishes?
To put the matter technically, an “importation” provision,
“[i]mportation into the United States, without the authority of the owner of copyright under this title, of copies . . . of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies . . . under section 106 . . . .”
17 U. S. C. §602(a)(1) (2006 ed., Supp. V) (emphasis added).
Thus
In Quality King Distributors, Inc. v. L‘anza Research Int‘l, Inc., 523 U. S. 135, 145 (1998), we held that
But Quality King considered an instance in which the copy, though purchased abroad, was initially manufactured in the United States (and then sent abroad and sold). This case is like Quality King but for one important fact. The copies at issue here were manufactured abroad. That fact is important because
Putting section numbers to the side, we ask whether the “first sale” doctrine applies to protect a buyer or other lawful owner of a copy (of a copyrighted work) lawfully manufactured abroad. Can that buyer bring that copy into the United States (and sell it or give it away) without obtaining permission to do so from the copyright owner? Can, for example, someone who purchases, say at a used bookstore, a book printed abroad subsequently resell it without the copyright owner‘s permission?
In our view, the answers to these questions are, yes. We hold that the “first
I
A
Respondent, John Wiley & Sons, Inc., publishes academic textbooks. Wiley obtains from its authors various foreign and domestic copyright assignments, licenses and permissions-to the point that we can, for present purposes, refer to Wiley as the relevant American copyright owner. See 654 F. 3d 210, 213, n. 6 (CA2 2011). Wiley often assigns to its wholly owned foreign subsidiary, John Wiley & Sons (Asia) Pte Ltd., rights to publish, print, and sell Wiley‘s English language textbooks abroad. App. to Pet. for Cert. 47a-48a. Each copy of a Wiley Asia foreign edition will likely contain language making clear that the copy is to be sold only in a particular country or geographical region outside the United States. 654 F. 3d, at 213.
For example, a copy of Wiley‘s American edition says, “Copyright © 2008 John Wiley & Sons, Inc. All rights reserved. . . . Printed in the United States of America.” J. Walker, Fundamentals of Physics, p. vi (8th ed. 2008). A copy of Wiley Asia‘s Asian edition of that book says:
“Copyright © 2008 John Wiley & Sons (Asia) Pte Ltd[.] All rights reserved. This book is authorized for sale in Europe, Asia, Africa, and the Middle East only and may be not exported out of these territories. Exportation from or importation of this book to another region without the Publisher‘s authorization is illegal and is a violation of the Publisher‘s rights. The Publisher may take legal action to enforce its rights. . . . Printed in Asia.” J. Walker, Fundamentals of Physics, p. vi (8th ed. 2008 Wiley Int‘l Student ed.).
Both the foreign and the American copies say:
“No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means . . . except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act.” Compare, e.g., ibid. (Int‘l ed.), with Walker, supra, at vi (American ed.).
The upshot is that there are two essentially equivalent versions of a Wiley textbook, 654 F. 3d, at 213, each ver-sion manufactured and sold with Wiley‘s permission: (1) an American version printed and sold in the United States, and (2) a foreign version manufactured and sold abroad. And Wiley makes certain that copies of the second version state that they are not to be taken (without permission) into the United States. Ibid.
Petitioner, Supap Kirtsaeng, a citizen of Thailand, moved to the United States in 1997 to study mathematics at Cornell University. Ibid. He paid for his education with the help of a Thai Government scholarship which required him to teach in Thailand for 10 years on his return. Brief for Petitioner 7. Kirtsaeng successfully completed his undergraduate courses at Cornell, successfully completed a Ph. D. program in mathematics at the University of Southern California, and then, as promised, returned to Thailand to teach. Ibid. While he was studying in the United States, Kirtsaeng asked his friends and family in Thailand to buy copies of foreign edition English-language textbooks at Thai book shops, where they sold at low prices, and to mail them to him in the United States. Id., at 7-8. Kirtsaeng would then sell them, reimburse his family and friends, and keep the profit. App. to Pet. for Cert. 48a-49a.
In 2008 Wiley brought this federal lawsuit against Kirtsaeng for copyright infringement. 654 F. 3d, at 213. Wiley claimed that Kirtsaeng‘s unauthorized importation of its books and his later resale of those books amounted to an infringement of Wiley‘s
The District Court held that Kirtsaeng could not assert the “first sale” defense because, in its view, that doctrine does not apply to “foreign-manufactured goods” (even if made abroad with the copyright owner‘s permission). App. to Pet. for Cert. 72a. The jury then found that Kirtsaeng had willfully infringed Wiley‘s American copyrights by selling and importing without authorization copies of eight of Wiley‘s copyrighted titles. And it assessed statutory damages of $600,000 ($75,000 per work). 654 F. 3d, at 215.
On appeal, a split panel of the Second Circuit agreed with the District Court. Id., at 222. It pointed out that
We granted Kirtsaeng‘s petition for certiorari to consider this question in light of different views among the Circuits. Compare id., at 221 (case below) (“first sale” doctrine does not apply to copies manufactured outside the United States), with Omega S. A. v. Costco Wholesale Corp., 541 F. 3d 982, 986 (CA9 2008) (“first sale” doctrine applies to copies manufactured outside the United States only if an authorized first sale occurs within the United States), aff ‘d by an equally divided court, 562 U. S. 40 (2010), and Sebastian Int‘l, Inc. v. Consumer Contacts (PTY) Ltd., 847 F. 2d 1093, 1098, n. 1 (CA3 1988) (limitation of the first sale doctrine to copies made within the United States “does not fit comfortably within the scheme of the Copyright Act“).
II
We must decide whether the words “lawfully made under this title” restrict the scope of
Under any of these geographical interpretations,
Kirtsaeng, however, reads the words “lawfully made under this title” as imposing a non-geographical limitation. He says that they mean made “in accordance with” or “in compliance with” the Copyright Act. Brief for Petitioner 26. In that case,
In our view,
A
The language of
The geographical interpretation, however, bristles with linguistic difficulties. It
To read the clause geographically, Wiley, like the Second Circuit and the Solicitor General, must first emphasize the word “under.” Indeed, Wiley reads “under this title” to mean “in conformance with the Copyright Act where the Copyright Act is applicable.” Brief for Respondent 15. Wiley must then take a second step, arguing that the Act “is applicable” only in the United States. Ibid. And the Solicitor General must do the same. See Brief for United States 6 (“A copy is ‘lawfully made under this title’ if Title 17 governs the copy‘s creation and the copy is made in compliance with Title 17‘s requirements“). See also post, at 7 (GINSBURG, J., dissenting) (“under” describes something “governed or regulated by another“).
One difficulty is that neither “under” nor any other word in the phrase means “where.” See, e.g., 18 Oxford English Dictionary, supra, at 947-952 (definition of “under“). It might mean “subject to,” see post, at 6, but as this Court has repeatedly acknowledged, the word evades a uniform, consistent meaning. See Kucana v. Holder, 558 U. S. 233, 245 (2010) (“‘under’ is chameleon“); Ardestani v. INS, 502 U. S. 129, 135 (1991) (“under” has “many dictionary definitions” and “must draw its meaning from its context“).
A far more serious difficulty arises out of the uncertainty and complexity surrounding the second step‘s effort to read the necessary geographical limitation into the word “applicable” (or the equivalent). Where, precisely, is the Copyright Act “applicable“? The Act does not instantly protect an American copyright holder from unauthorized piracy taking place abroad. But that fact does not mean the Act is inapplicable to copies made abroad. As a matter of ordinary English, one can say that a statute imposing, say, a tariff upon “any rhododendron grown in Nepal” applies to all Nepalese rhododendrons. And, similarly, one can say that the American Copyright Act is applicable to all pirated copies, including those printed overseas. Indeed, the Act itself makes clear that (in the Solicitor General‘s language) foreign-printed pirated copies are “subject to” the Act.
The appropriateness of this linguistic usage is underscored by the fact that
The Ninth Circuit‘s geographical interpretation produces still greater linguistic difficulty. As we said, that Circuit interprets the “first sale” doctrine to cover both (1) copies manufactured in the United States and (2) copies manufactured abroad but first sold in the United States with the American copyright owner‘s permission. Denbicare U. S. A., 84 F. 3d, at 1149-1150. See also Brief for Respondent 16 (suggesting that the clause at least excludes “the foreign production of a copy for distribution exclusively abroad“); id., at 51 (the Court need “not decide whether the copyright owner would be able to restrict further distribution” in the case of “a downstream domestic purchaser of authorized imports“); Brief for Petitioner in Costco Wholesale Corp. v. Omega, S. A., O. T. 2010, No. 08-1423, p. 12 (excepting imported copies “made by unrelated foreign copyright holders” (emphasis deleted)).
We can understand why the Ninth Circuit may have thought it necessary to add the second part of its definition. As we shall later describe, see Part II-D, infra, without some such qualification a copyright holder could prevent a buyer from domestically reselling or even giving away copies of a video game made in Japan, a film made in Germany, or a dress (with a design copyright) made in China, even if the copyright holder has granted permission for the foreign manufacture, importation, and an initial domestic sale of the copy. A publisher such as Wiley would be free to print its books abroad, allow their importation and sale within the United States, but prohibit students from later selling their used texts at a campus bookstore. We see no way, however, to reconcile this half-geographical/half-nongeographical interpretation with the language of the phrase, “lawfully made under this title.” As a matter of English, it would seem that those five words either do cover copies lawfully made abroad or they do not.
In sum, we believe that geographical interpretations create more linguistic problems than they resolve. And considerations of simplicity and coherence tip the purely linguistic balance in Kirtsaeng‘s, nongeographical, favor.
B
Both historical and contemporary statutory context indicate that Congress, when writing the present version of
“[N]othing in this Act shall be deemed to forbid, prevent, or restrict the transfer of any copy of a copyrighted work the possession of which has been lawfully obtained.” Copyright Act of 1909, §41, 35 Stat. 1084 (emphasis added).
See also Copyright Act of 1947, §27, 61 Stat. 660. The predecessor says nothing about geography (and Wiley does not argue that it does). So we ask whether Congress, in changing its language implicitly introduced a geographical limitation that previously was lacking. See also Part II-C, infra (discussing 1909 codification of common-law principle).
A comparison of language indicates that it did not. The predecessor says that the “first sale” doctrine protects “the transfer of any copy the possession of which has been lawfully obtained.” The present version says that “the owner of a particular copy or phonorecord lawfully made under this title is entitled to sell or otherwise dispose of the possession of that copy or
The language of the former version referred to those who are not owners of a copy, but mere possessors who “lawfully obtained” a copy. The present version covers only those who are owners of a “lawfully made” copy. Whom does the change leave out? Who might have lawfully obtained a copy of a copyrighted work but not owned that copy? One answer is owners of movie theaters, who during the 1970‘s (and before) often leased films from movie distributors or filmmakers. See S. Donahue, American Film Distribution 134, 177 (1987) (describing producer-distributer and distributer-exhibitor agreements); Note, The Relationship Between Motion Picture Distribution and Exhibition: An Analysis of the Effects of Anti-Blind Bidding Legislation, 9 Comm/Ent. L. J. 131, 135 (1986). Because the theater owners had “lawfully obtained” their copies, the earlier version could be read as allowing them to sell that copy, i.e., it might have given them “first sale” protection. Because the theater owners were lessees, not owners, of their copies, the change in language makes clear that they (like bailees and other lessees) cannot take advantage of the “first sale” doctrine. (Those who find legislative history useful will find confirmation in, e.g., House Committee on the Judiciary, Copyright Law Revision, Supplementary Report of the Register of Copyrights on the General Revision of the U. S. Copyright Law: 1965 Revision Bill, 89th Cong., 1st Sess., pt. 6, p. 30 (Comm. Print 1965) (hereinafter Copyright Law Revision) (“[W]here a person has rented a print of a motion picture from the copyright owner, he would have no right to lend, rent, sell, or otherwise dispose of the print without first obtaining the copyright owner‘s permission“). See also Platt & Munk Co. v. Republic Graphics, Inc., 315 F. 2d 847, 851 (CA2 1963) (Friendly, J.) (pointing out predecessor statute‘s leasing problem)).
This objective perfectly well explains the new language of the present version, including the five words here at issue. Section 109(a) now makes clear that a lessee of a copy will not receive “first sale” protection but one who owns a copy will receive “first sale” protection, provided, of course, that the copy was ”lawfully made” and not pirated. The new language also takes into account that a copy may be “lawfully made under this title” when the copy, say of a phonorecord, comes into its owner‘s possession through use of a compulsory license, which “this title” provides for elsewhere, namely, in
Other provisions of the present statute also support a nongeographical interpretation. For one thing, the statute phases out the “manufacturing clause,” a clause that appeared in earlier statutes and had limited importation of many copies (of copyrighted works) printed outside the United States.
The “equal treatment” principle, however, is difficult to square with a geographical interpretation of the “first sale” clause that would grant the holder of an American copyright (perhaps a foreign national, see supra, at 10) permanent control over the American distribution chain (sales, resales, gifts, and other distribution) in respect to copies printed abroad but not in respect to copies printed in America. And it is particularly difficult to believe that Congress would have sought this unequal treatment while saying nothing about it and while, in a related clause (the manufacturing phase-out), seeking the opposite kind of policy goal. Cf. Golan v. Holder, 565 U. S. 302 (2012) (Congress has moved from a copyright regime that, prior to 1891, entirely excluded foreign works from U. S. copyright protection to a regime that now “ensure[s] that most works, whether foreign or domestic, would be governed by the same legal regime” (emphasis added)).
Finally, we normally presume that the words “lawfully made under this title” carry the same meaning when they appear in different but related sections. Department of Revenue of Ore. v. ACF Industries, Inc., 510 U. S. 332, 342 (1994). But doing so here produces surprising consequences. Consider:
(1) Section 109(c) says that, despite the copyright owner‘s exclusive right “to display” a copyrighted work (provided in
(2) Section 109(e) specifically provides that the owner of a particular copy of a copyrighted video arcade game “lawfully made under this title” may “publicly perform or display that game in coin-operated equipment” without the authorization of the copyright owner. To interpret these words geographically means that an arcade owner could not (“without the authority of the copyright owner“) perform or display arcade games (whether new or used) originally made in Japan. Cf. Red Baron-Franklin Park, Inc. v. Taito Corp., 883 F. 2d 275 (CA4 1989).
(3) Section 110(1) says that a teacher, without the copyright owner‘s authorization, is allowed to perform or display a copyrighted work (say, an audiovisual work) “in the course of face-to-face teaching activities“-unless the teacher knowingly used “a copy that was not lawfully made under this title.” To interpret these words geographically would mean that the teacher could not (without further authorization) use a copy of a film during class if the copy was lawfully made in Canada, Mexico, Europe, Africa, or Asia.
(4) In its introductory sentence,
Wiley basically accepts the first three readings, but argues that Congress intended the restrictive consequences. And it argues that context simply requires that the words of the fourth example receive a different interpretation. Leaving the fourth example to the side, we shall explain in Part II-D, infra, why we find it unlikely that Congress would have intended these, and other related consequences.
A relevant canon of statutory interpretation favors a nongeographical reading. “[W]hen a statute covers an issue previously governed by the common law,” we must presume that “Congress intended to retain the substance of the common law.” Samantar v. Yousuf, 560 U. S. ___, ___, n. 13 (2010) (slip op., at 14, n. 13). See also Isbrandtsen Co. v. Johnson, 343 U. S. 779, 783 (1952) (“Statutes which invade the common law . . . are to be read with a presumption favoring the retention of long-established and familiar principles, except when a statutory purpose to the contrary is evident“).
The “first sale” doctrine is a common-law doctrine with an impeccable historic pedigree. In the early 17th century Lord Coke explained the common law‘s refusal to permit restraints on the alienation of chattels. Referring to Littleton, who wrote in the 15th century, Gray, Two Contributions to Coke Studies, 72 U. Chi. L. Rev. 1127, 1135 (2005), Lord Coke wrote:
“[If] a man be possessed of . . . a horse, or of any other chattell . . . and give or sell his whole interest . . . therein upon condition that the Donee or Vendee shall not alien[ate] the same, the [condition] is voi[d], because his whole interest . . . is out of him, so as he hath no possibilit[y] of a Reverter, and it is against Trade and Traffi[c], and bargaining and contracting betwee[n] man and man: and it is within the reason of our Author that it should ouster him of all power given to him.” 1 E. Coke, Institutes of the Laws of England §360, p. 223 (1628).
A law that permits a copyright holder to control the resale or other disposition of a chattel once sold is similarly “against Trade and Traffi[c], and bargaining and contracting.” Ibid.
With these last few words, Coke emphasizes the importance of leaving buyers of goods free to compete with each other when reselling or otherwise disposing of those goods. American law too has generally thought that competition, including freedom to resell, can work to the advantage of the consumer. See, e.g., Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U. S. 877, 886 (2007) (restraints with “manifestly anticompetitive effects” are per se illegal; others are subject to the rule of reason (internal quotation marks omitted)); 1 P. Areeda & H. Hovenkamp, Antitrust Law ¶100, p. 4 (3d ed. 2006) (“[T]he principal objective of antitrust policy is to maximize consumer welfare by encouraging firms to behave competitively“).
The “first sale” doctrine also frees courts from the administrative burden of trying to enforce restrictions upon difficult-to-trace, readily movable goods. And it avoids the selective enforcement inherent in any such effort. Thus, it is not surprising that for at least a century the “first sale” doctrine has played an important role in American copyright law. See Bobbs-Merrill Co. v. Straus, 210 U. S. 339 (1908);
The common-law doctrine makes no geographical distinctions; nor can we find any in Bobbs-Merrill (where this Court first applied the “first sale” doctrine) or in
The dissent argues that another principle of statutory interpretation works against our reading, and points out that elsewhere in the statute Congress used different words to express something like the non-geographical reading we adopt. Post, at 8–9 (quoting
D
Associations of libraries, used-book dealers, technology companies, consumer-goods retailers, and museums point to various ways in which a geographical interpretation would fail to further basic constitutional copyright objectives, in particular “promot[ing] the Progress of Science and useful Arts.”
The American Library Association tells us that library collections contain at least 200 million books published abroad (presumably, many were first published in one of the nearly 180 copyright-treaty nations and enjoy American copyright protection under
How, the American Library Association asks, are the libraries to obtain permission to distribute these millions of books? How can they find, say, the copyright owner of a foreign book, perhaps written decades ago? They may not know the copyright holder‘s present address. Brief for American Library Association 15 (many books lack indication of place of manufacture; “no practical way to learn where [a] book was printed“). And, even where addresses can be found, the costs of finding them, contacting owners, and negotiating may be high indeed. Are the libraries to stop circulating or distributing or displaying the millions of books in their collections that were printed abroad?
Used-book dealers tell us that, from the time when Benjamin Franklin and Thomas
Technology companies tell us that “automobiles, microwaves, calculators, mobile phones, tablets, and personal computers” contain copyrightable software programs or packaging. Brief for Public Knowledge et al. as Amici Curiae 10. See also Brief for Association of Service and Computer Dealers International, Inc., et al. as Amici Curiae 2. Many of these items are made abroad with the American copyright holder‘s permission and then sold and imported (with that permission) to the United States. Brief for Retail Litigation Center, Inc., et al. as Amici Curiae 4. A geographical interpretation would prevent the resale of, say, a car, without the permission of the holder of each copyright on each piece of copyrighted automobile software. Yet there is no reason to believe that foreign auto manufacturers regularly obtain this kind of permission from their software component suppliers, and Wiley did not indicate to the contrary when asked. See Tr. of Oral Arg. 29–30. Without that permission a foreign car owner could not sell his or her used car.
Retailers tell us that over $2.3 trillion worth of foreign goods were imported in 2011. Brief for Retail Litigation Center 8. American retailers buy many of these goods after a first sale abroad. Id., at 12. And, many of these items bear, carry, or contain copyrighted “packaging, logos, labels, and product inserts and instructions for [the use of] everyday packaged goods from floor cleaners and health and beauty products to breakfast cereals.” Id., at 10–11. The retailers add that American sales of more traditional copyrighted works, “such as books, recorded music, motion pictures, and magazines” likely amount to over $220 billion. Id., at 9. See also id., at 10 (electronic game industry is $16 billion). A geographical interpretation would subject many, if not all, of them to the disruptive impact of the threat of infringement suits. Id., at 12.
Art museum directors ask us to consider their efforts to display foreign-produced works by, say, Cy Twombly, Rene Magritte, Henri Matisse, Pablo Picasso, and others. See supra, at 10 (describing how
These examples, and others previously mentioned, help explain why Lord Coke considered the “first sale” doctrine necessary
Neither Wiley nor any of its many amici deny that a geographical interpretation could bring about these “horribles“—at least in principle. Rather, Wiley essentially says that the list is artificially invented. Brief for Respondent 51–52. It points out that a federal court first adopted a geographical interpretation more than 30 years ago. CBS, Inc. v. Scorpio Music Distributors, Inc., 569 F. Supp. 47, 49 (ED Pa. 1983), summarily aff‘d, 738 F. 2d 424 (CA3 1984) (table). Yet, it adds, these problems have not occurred. Why not? Because, says Wiley, the problems and threats are purely theoretical; they are unlikely to reflect reality. See also post, at 30–31.
We are less sanguine. For one thing, the law has not been settled for long in Wiley‘s favor. The Second Circuit, in its decision below, is the first Court of Appeals to adopt a purely geographical interpretation. The Third Circuit has favored a nongeographical interpretation. Sebastian Int‘l, 847 F. 2d 1093. The Ninth Circuit has favored a modified geographical interpretation with a nongeographical (but textually unsustainable) corollary designed to diminish the problem. Denbicare U. S. A., 84 F. 3d 1143. See supra, at 11–12. And other courts have hesitated to adopt, and have cast doubt upon, the validity of the geographical interpretation. Pearson Educ., Inc. v. Liu, 656 F. Supp. 2d 407 (SDNY 2009); Red-Baron Franklin Park, Inc. v. Taito Corp., No. 88–0156–A, 1988 WL 167344, *3 (ED Va. 1988), rev‘d on other grounds, 883 F. 2d 275 (CA4 1989).
For another thing, 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. Museums, for example, are not in the habit of asking their foreign counterparts to check with the heirs of copyright owners before sending, e.g., a Picasso on tour. Brief for Association of Art Museum Directors 11–12. That inertia means a dramatic change is likely necessary before these institutions, instructed by their counsel, would begin to engage in the complex permission-verifying process that a geographical interpretation would demand. And this Court‘s adoption of the geographical interpretation could provide that dramatic change. These intolerable consequences (along with the absurd result that the copyright owner can exercise downstream control even when it authorized the import or first sale) have understandably led the Ninth Circuit, the Solicitor General as amicus, and the dissent to adopt textual readings of the statute that attempt to mitigate these harms. Brief for United States 27–28; post, at 24–28. But those readings are not defensible, for they require too many unprecedented jumps over linguistic and other hurdles that in our view are insurmountable. See, e.g., post, at 26 (acknowledging that its reading of
Finally, the fact that harm has proved limited so far may simply reflect the reluctance of copyright holders so far to assert geographically based resale rights. They may decide differently if the law is clarified in their favor. Regardless, a copyright law that can work in practice only if unenforced is not a sound copyright law. It is a law that would create uncertainty, would bring about selective enforcement, and, if widely unenforced, would breed disrespect for copyright law itself.
III
Wiley and the dissent make several additional important arguments in favor of the geographical interpretation. First, they say that our Quality King decision strongly supports its geographical interpretation. In that case we asked whether the Act‘s “importation provision,” now
We held that the importation provision did not prohibit sending the products back into the United States (without the copyright owner‘s permission). That section says:
“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106.”
17 U. S. C. §602(a)(1) (2006 ed., Supp. V) (emphasis added). See also§602(a) (1994 ed.).
We pointed out that this section makes importation an infringement of the “exclusive right to distribute . . . under 106.” We noted that
In reaching this conclusion we endorsed Bobbs-Merrill and its statement that the copyright laws were not “intended to create a right which would permit the holder of the copyright to fasten, by notice in a book . . . a restriction upon the subsequent alienation of the subject-matter of copyright after the owner had parted with the title to one who had acquired full dominion over it.” 210 U. S., at 349–350.
We also explained why we rejected the claim that our interpretation would make
In Quality King we rejected the “superfluous” argument for similar reasons. But, when rejecting it, we said that, where an author gives exclusive American distribution rights to an American publisher and exclusive British distribution rights to a British publisher, “presumably only those [copies] made by the publisher of the United States edition would be ‘lawfully made under this title’ within the meaning of
We cannot, however, give the Quality King statement the legal weight for which Wiley argues. The language “lawfully made under this title” was not at issue in Quality King; 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?
To the contrary, we have written that we are not necessarily bound by dicta should more complete argument demonstrate that the dicta is not correct. Central Va. Community College v. Katz, 546 U. S. 356, 363 (2006) (“[W]e are not bound to follow our dicta in a prior case in which the point now at issue was not fully debated“); Humphrey‘s Executor v. United States, 295 U. S. 602, 627–628 (1935) (rejecting, under stare decisis, dicta, “which may be followed if sufficiently persuasive but which are not controlling“). And, given the bit part that our Quality King statement played in our Quality King decision, we believe the view of stare decisis set forth in these opinions applies to the matter now before us.
Second, Wiley and the dissent argue (to those who consider legislative history) that the Act‘s legislative history supports their interpretation. But the historical events to which it points took place more than a decade before the enactment of the Act and, at best, are inconclusive.
During the 1960‘s, representatives of book, record, and film industries, meeting with the Register of Copyrights to discuss copyright revision, complained about the difficulty of dividing international markets. Copyright Law Revision Discussion and Comments on Report of the Register of Copyrights on the General Revision of the U. S. Copyright Law, 88th Cong., 1st Sess., pt. 2, p. 212 (Comm. Print 1963) (English editions of “particular” books “fin[d]” their “way into this country“); id., at 213 (works “publi[shed] in a country where there is no copyright protection of any sort” are put into “the free stream of commerce” and “shipped to the United States“); ibid. (similar concern in respect to films).
The then-Register of Copyrights, Abraham Kaminstein, found these examples “very troubl[ing].” Ibid. And the Copyright Office released a draft provision that it said “deals with the matter of the importation for distribution in the United States of foreign copies that were made under proper authority but that, if sold in the United States, would be sold in contravention of the rights of the copyright owner who holds the exclusive right to sell copies in the United States.” Id., pt. 4, at 203. That draft version, without reference to
“Importation into the United States of copies or records of a work for the purpose of distribution to the public shall, if such articles are imported without the authority of the owner of the exclusive right to distribute copies or records under this title, constitute an infringement of copyright actionable under section 35 [17 U. S. C. §501].” Id., Preliminary Draft for Revised U. S. Copyright Law and Discussions and Comments, 88th Cong., 2d Sess., pt. 3, pp. 32–33 (Comm. Print 1964).
In discussing the draft, some of those present expressed concern about its effect on the “first sale” doctrine. For example, Irwin Karp, representing the Authors League of America asked, “If a German jobber lawfully buys copies from a German publisher, are we not running into the problem of restricting his transfer of his lawfully obtained copies?” Id., pt. 4, at 211. The Copyright Office representative replied, “This could vary from one situation to another, I guess. I should guess, for example, that if a book publisher transports [i.e., does not sell] copies to a wholesaler [i.e., a nonowner], this is not yet the kind of transaction that exhausts the right to control disposition.” Ibid. (emphasis added).
The Office later withdrew the draft, replacing it with a draft, which, by explicitly referring to
Still, that part of the report says nothing about the “first sale” doctrine, about
But to ascertain the best reading of
“Section 109(a) restates and confirms the principle that, where the copyright owner has transferred ownership of a particular copy or phonorecord of a work, the person to whom the copy or phonorecord is transferred is entitled to dispose of it by sale, rental, or any other means. Under this principle, which has been established by the court decisions and . . . the present law, the copyright owner‘s exclusive right of public distribution would have no effect upon anyone who owns ‘a particular copy or phonorecord lawfully made under this title’ and who wishes to transfer it to someone else or to destroy it.
. . . . .
“To come within the scope of section 109(a), a copy or phonorecord must have been ‘lawfully made under this title,’ though not necessarily with the copyright owner‘s authorization. For example, any resale of an illegally ‘pirated’ phonorecord would be an infringement but the disposition of a phonorecord legally made under the compulsory licensing provisions of section 115 would not.” H. R. Rep. No. 94–1476, at 79 (emphasis added).
Accord, S. Rep. No. 94–473, pp. 71–72 (1975).
This history reiterates the importance of the “first sale” doctrine. See, e.g., Copyright Law Revision, 1964 Revision Bill with Discussions and Comments, 89th Cong., 1st Sess., pt. 5, p. 66 (Comm. Print 1965) (“[F]ull ownership of a lawfully-made copy authorizes its owner to dispose of it freely“). It explains, as we have explained, the nongeographical purposes of the words “lawfully made under this title.” Part II–B, supra. And it says nothing about geography. Nor, importantly, did
Third, Wiley and the dissent claim that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights.
The Constitution describes the nature of American copyright law by providing Congress with the power to “secur[e]” to “[a]uthors” “for limited [t]imes” the “exclusive [r]ight to their . . . [w]ritings.”
To the contrary, Congress enacted a copyright law that (through the “first sale” doctrine) limits copyright holders’ ability to divide domestic markets. And that limitation is consistent with antitrust laws that ordinarily forbid market divisions. Cf. Palmer v. BRG of Ga., Inc., 498 U. S. 46, 49–50 (1990) (per curiam) (“[A]greements between competitors to allocate territories to minimize competition are illegal“). Whether copyright owners should, or should not, have more than ordinary commercial power to divide international markets is a matter for Congress to decide. We do no more here than try to determine what decision Congress has taken.
Fourth, the dissent and Wiley contend that our decision launches United States copyright law into an unprecedented regime of “international exhaustion.” Post, at 18–23; Brief for Respondent 45–46. But they point to nothing indicative of congressional intent in 1976. The dissent also claims that it is clear that the United States now opposes adopting such a regime, but the Solicitor General as amicus has taken no such position in this case. In fact, when pressed at oral argument, the Solicitor General stated that the consequences of Wiley‘s reading of the statute (perpetual downstream control) were “worse” than those of Kirtsaeng‘s reading (restriction of market segmentation). Tr. of Oral Arg. 51. And the dissent‘s reliance on the Solicitor General‘s position in Quality King is undermined by his agreement in that case with our reading of
Moreover, the exhaustion regime the dissent apparently favors would provide that “the sale in one country of a good” does not “exhaus[t] the intellectual-property owner‘s right to control the distribution of that good elsewhere.” Post, at 18–19. But our holding in Quality King that
IV
For these reasons we conclude that the considerations supporting Kirtsaeng‘s nongeographical interpretation of the words “lawfully made under this title” are the more persuasive. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
SUPAP KIRTSAENG, DBA BLUECHRISTINE99, PETITIONER v. JOHN WILEY & SONS, INC.
No. 11–697
SUPREME COURT OF THE UNITED STATES
March 19, 2013
568 U. S. ____ (2013)
KAGAN, J.
JUSTICE KAGAN,
I concur fully in the Court‘s opinion. Neither the text nor the history of
As the Court explains, the first-sale doctrine has played an integral part in American copyright law for over a century. See ante, at 17–19; Bobbs-Merrill Co. v. Straus, 210 U. S. 339 (1908). No codification of the doctrine prior to 1976 even arguably limited its application to copies made in the United States. See ante, at 12. And nothing in the text or history of
That said, John Wiley is right that the Court‘s decision, when combined with Quality King, substantially narrows
But if Congress views the shrinking of
At bottom, John Wiley (together with the dissent) asks us to misconstrue
KIRTSAENG v. JOHN WILEY & SONS, INC.
KAGAN, J., concurring
invitation to save
SUPAP KIRTSAENG, DBA BLUECHRISTINE99, PETITIONER v. JOHN WILEY & SONS, INC.
No. 11–697
SUPREME COURT OF THE UNITED STATES
[March 19, 2013]
568 U. S. ____ (2013)
GINSBURG, J., dissenting
JUSTICE GINSBURG, with whom JUSTICE KENNEDY joins, and with whom JUSTICE SCALIA joins except as to Parts III and V–B–1, dissenting.
“In the interpretation of statutes, the function of the courts is easily stated. It is to construe the language so as to give effect to the intent of Congress.” United States v. American Trucking Assns., Inc., 310 U. S. 534, 542 (1940). Instead of adhering to the Legislature‘s design, the Court today adopts an interpretation of the Copyright Act at odds with Congress’ aim to protect copyright owners against the unauthorized importation of low-priced, foreign-made copies of their copyrighted works. The Court‘s bold departure from Congress’ design is all the more stunning, for it places the United States at the vanguard of the movement for “international exhaustion” of copyrights—a movement the United States has steadfastly resisted on the world stage.
To justify a holding that shrinks to insignificance copyright protection against the unauthorized importation of foreign-made copies, the Court identifies several “practical problems.” Ante, at 24. The Court‘s parade of horribles, however, is largely imaginary. Congress’ objective in
I
Because economic conditions and demand for particular goods vary across the globe, copyright owners have a financial incentive to charge different prices for copies of their works in different geographic regions. Their ability to engage in such price discrimination, however, is undermined if arbitrageurs are permitted to import copies from low-price regions and sell them in high-price regions. The question in this case is whether the unauthorized importation of foreign-made copies constitutes copyright infringement under U. S. law.
To answer this question, one must examine three provisions of Title 17 of the U. S. Code:
Section 602(a)(1) (2006 ed., Supp. V)1—last, but most critical, of the three copyright provisions bearing on this case—is an importation ban. It reads:
“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501.”
In Quality King Distributors, Inc. v. L‘anza Research Int‘l, Inc., 523 U. S. 135, 143–154 (1998), the Court held that a copyright owner‘s right to control importation under
Important to the Court‘s holding, the copies at issue in Quality King had been “‘lawfully made under [Title 17]‘“—a prerequisite for application of
“If the author of [a] work gave the exclusive United States distribution rights—enforceable under the Act—to the publisher of the United States edition and the exclusive British distribution rights to the publisher of the British edition, . . . presumably only those [copies] made by the publisher of the United States edition would be ‘lawfully made under this title’ within the meaning of §109(a). The first sale doctrine would not provide the publisher of the British edition who decided to sell in the American market with a defense to an action under §602(a) (or, for that matter, to an action under §106(3), if there was a distribution of the copies).” Id., at 148.
As the District Court and the Court of Appeals concluded, see 654 F. 3d 210, 221–222 (CA2 2011); App. to Pet. for Cert. 70a–73a, application of the Quality King analysis to the facts of this case would preclude any invocation of
The Court does not deny that under the language I have quoted from Quality King, Wiley would prevail. Ante, at 27. Nevertheless, the Court dismisses this language, to which all Members of the Quality King Court subscribed, as ill-considered dictum. Ante, at 27–28. I agree that the discussion was dictum in the sense that it was not essential to the Court‘s judgment. See Quality King, 523 U. S., at 154 (GINSBURG, J., concurring) (“[W]e do not today resolve cases in which the allegedly infringing imports were manufactured abroad.“). But I disagree with the Court‘s conclusion that this dictum was ill considered. Instead, for the reasons explained below, I would hold, consistently with Quality King‘s dictum, that
II
The text of the Copyright Act demonstrates that Congress intended to provide copyright owners with a potent remedy against the importation of foreign-made copies of their copyrighted works. As the Court recognizes, ante, at 3, this case turns on the meaning of the phrase “lawfully made under this title” in
Section 109(a), properly read, affords Kirtsaeng no defense against Wiley‘s claim of copyright infringement. The Copyright Act, it has been observed time and again, does not apply extraterritorially. See United Dictionary Co. v. G. & C. Merriam Co., 208 U. S. 260, 264 (1908) (copyright statute requiring that U. S. copyright notices be placed in all copies of a work did not apply to copies published abroad because U. S. copyright laws have no “force” beyond the United States’ borders); 4 M. Nimmer & D. Nimmer, Copyright §17.02, p. 17–18 (2012) (hereinafter Nimmer) (“[C]opyright laws do not have any extraterritorial operation.“); 4 W. Patry, Copyright §13:22, p. 13–66 (2012) (hereinafter Patry) (“Copyright laws are rigorously territorial.“). The printing of Wiley‘s foreign-manufactured textbooks therefore was not governed by Title 17. The textbooks thus were not “lawfully made under [Title 17],” the crucial precondition for application of
The Court‘s point of departure is similar to mine. According to the Court, the phrase “‘lawfully made under this title’ means made ‘in accordance with’ or ‘in compliance with’ the Copyright Act.” Ante, at 8. But the Court overlooks that, according to the very dictionaries it cites, ante, at 9, the word “under” commonly signals a relationship of subjection, where one thing is governed or regulated by another. See Black‘s Law Dictionary 1525 (6th ed. 1990) (“under”
The logical implication of the Court‘s definition of the word “under” is that any copy manufactured abroad—even a piratical one made without the copyright owner‘s authorization and in violation of the law of the country where it was created—would fall within the scope of
The Court rightly refuses to accept such an absurd conclusion. Instead, it interprets
Not only does the Court adopt an unnatural construction of the
The Court‘s decision also overwhelms
The far more plausible reading of
III
The history of
Publishing-industry representatives argued strenuously against the position initially taken by the Copyright Office. At a 1962 panel discussion on the Copyright Office‘s report, for example, Horace Manges of the American Book Publishers Council stated:
“When a U. S. book publisher enters into a contract with a British publisher to acquire exclusive U. S. rights for a particular book, he often finds that the English edition . . . of that particular book finds its way into this country. Now it‘s all right to say, ‘Commence a lawsuit for breach of contract.’ But this is expensive, burdensome, and, for the most part, ineffective.” Copyright Law Revision Part 2: Discussion and Comments on Report of the Register of Copyrights on the General Revision of the U. S. Copyright Law, 88th Cong., 1st Sess., 212 (H. R. Judiciary Comm. Print 1963).
Sidney Diamond, representing London Records, elaborated on Manges’ statement. “There are many situations,” he explained, “in which it is not necessarily a question of the inadequacy of a contract remedy—in the sense that it may be difficult or not quick enough to solve the particular problem.” Id., at 213. “Very frequently,” Diamond stated, publishers “run into a situation where . . . copies of [a] work . . . produced in a foreign country . . . may be shipped [to the United States] without violating any contract of the U. S. copyright proprietor.” Ibid. To illustrate, Diamond noted, if a “British publisher [sells a copy] to an individual who in turn ship[s] it over” to the United States, the individual‘s conduct would not “violate [any] contract between the British and the American publisher.” Ibid. In such a case, “no possibility of any contract remedy” would exist. Ibid. The facts of Kirtsaeng‘s case fit Diamond‘s example, save that the copies at issue here were printed and initially sold in Asia rather than Great Britain.
After considering comments on its 1961 report, the Copyright Office “prepared a preliminary draft of provisions for a new copyright statute.” Copyright Law Revision Part 3: Preliminary Draft for Revised U. S. Copyright Law and Discussions and Comments on the Draft, 88th Cong., 2d Sess., V (H. R. Judiciary Comm. Print 1964). Section 44 of the draft statute addressed the concerns raised by publishing-industry representatives. In particular, §44(a) provided:
“Importation into the United States of copies or records of a work for the purpose of distribution to the public shall, if such articles are imported without the authority of the owner of the exclusive right to distribute copies or records under this title, constitute an infringement of copyright actionable under section 35 [i.e., the section providing for a private cause of action for copyright infringement].” Id., at 32–33.
In a 1964 panel discussion regarding the draft statute, Abe Goldman, the Copyright Office‘s General Counsel, left no doubt about the meaning of §44(a). It represented, he explained, a “shif[t]” from the Copyright Office‘s 1961 report, which had recommended against using copyright law to facilitate publishers’ efforts to segment international markets. Copyright Law Revision Part 4: Further Discussions and Comments on Preliminary Draft for Revised U. S. Copyright Law, 88th Cong., 2d Sess., 203 (H. R. Judiciary Comm. Print 1964). Section 44(a), Goldman stated, would allow copyright owners to bring infringement actions against importers of “foreign copies that were made under proper authority.” Ibid. See also id., at 205–206 (Goldman agreed with a speaker‘s comment that §44(a) “enlarge[d]” U. S. copyright law by extending import prohibitions “to works legally produced in Europe” and other foreign countries).11
The next step in the copyright revision process was the introduction in Congress
“Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work for the purpose of distribution to the public is an infringement of the exclusive right to distribute copies or phonorecords under section 106, actionable under section 501.” Id., at 292.12
The Court implies that the 1965 bill‘s “explici[t] refer[ence] to §106” showed a marked departure from §44(a) of the Copyright Office‘s prior draft. Ante, at 29. The Copyright Office, however, did not see it that way. In its summary of the 1965 bill‘s provisions, the Copyright Office observed that §602(a) of the 1965 bill, like §44(a) of the Copyright Office‘s prior draft, see supra, at 15–16, permitted copyright owners to bring infringement actions against unauthorized importers in cases “where the copyright owner had authorized the making of [the imported] copies in a foreign country for distribution only in that country.” Copyright Law Revision Part 6, at 149–150. See also id., at XXVI (Under §602(a) of the 1965 bill, “[a]n unauthorized importer could be enjoined and sued for damages both where the copies or phonorecords he was importing were ‘piratical’ (that is, where their making would have constituted an infringement if the U. S. copyright law could have been applied), and where their making was ‘lawful.’ “).
The current text of
“Section 602 [deals] with two separate situations: importation of ‘piratical’ articles (that is, copies or phonorecords made without any authorization of the copyright owner), and unauthorized importation of copies or phonorecords that were lawfully made. The general approach of section 602 is to make unauthorized importation an act of infringement in both cases, but to permit the Bureau of Customs to prohibit importation only of ‘piratical’ articles.” S. Rep. No. 94–473, p. 151 (1975) (emphasis added). See also H. R. Rep. No. 94–1476, p. 169 (1976) (same).
In sum, the legislative history of the Copyright Act of 1976 is hardly “inconclusive.” Ante, at 28. To the contrary, it confirms what the plain text of the Act
IV
Unlike the Court‘s holding, my position is consistent with the stance the United States has taken in international-trade negotiations. This case bears on the highly contentious trade issue of interterritorial exhaustion. The issue arises because intellectual property law is territorial in nature, see supra, at 6, which means that creators of intellectual property “may hold a set of parallel” intellectual property rights under the laws of different nations. Chiappetta, The Desirability of Agreeing to Disagree: The WTO, TRIPS, International IPR Exhaustion and a Few Other Things, 21 Mich. J. Int‘l L. 333, 340–341 (2000) (hereinafter Chiappetta). There is no international con sensus on whether the sale in one country of a good incorporating protected intellectual property exhausts the intellectual property owner‘s right to control the distribution of that good elsewhere. Indeed, the members of the World Trade Organization, “agreeing to disagree,”14 provided in Article 6 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Apr. 15, 1994, 33 I. L. M. 1197, 1200, that “nothing in this Agreement shall be used to address the issue of . . . exhaustion.” See Chiappetta 346 (observing that exhaustion of intellectual property rights was “hotly debated” during the TRIPS negotiations and that Article 6 “reflects [the negotiators‘] ultimate inability to agree” on a single international standard). Similar language appears in other treaties to which the United States is a party. See World Intellectual Property Organization (WIPO) Copyright Treaty, Art. 6(2), Dec. 20, 1996, S. Treaty Doc. No. 105–17, p. 7 (“Nothing in this Treaty shall affect the freedom of Contracting Parties to determine the conditions, if any, under which the exhaustion of the right [to control distribution of copies of a copyrighted work] applies after the first sale or other transfer of ownership of the original or a copy of the work with the authorization of the author.“); WIPO Performances and Phonograms Treaty, Art. 8(2), Dec. 20, 1996, S. Treaty Doc. No. 105–17, p. 28 (containing language nearly identical to Article 6(2) of the WIPO Copyright Treaty).
In the absence of agreement at the international level, each country has been left to choose for itself the exhaustion framework it will follow. One option is a national-exhaustion regime, under which a copyright owner‘s right to control distribution is exhausted only by the first sale of a copy in the United States. Under such a regime, the owners of U. S. copyrights could bar the importation of copies of their works that were lawfully made and sold abroad. A second option is a regional-exhaustion regime, under which the first sale of a copy anywhere within a defined region exhausts a copyright owner‘s right to control distribution throughout that region. Finally, a third option is an international-exhaustion regime, under which the first sale of a copy anywhere in the world exhausts a copyright owner‘s right to control distribution in the United States.
GINSBURG, J., dissenting
to control distribution of a particular copy is exhausted only within the country in which the copy is sold. See Forsyth & Rothnie, Parallel Imports, in The Interface Between Intellectual Property Rights and Competition Policy 429, 430 (S. Anderman ed. 2007) (hereinafter Forsyth & Rothnie). Another option is a rule of international exhaustion, under which the authorized distribution of a particular copy anywhere in the world exhausts the copyright owner‘s distribution
Strong arguments have been made both in favor of, and in opposition to, international exhaustion. See Chiappetta 360 (“[r]easonable people making valid points can, and do, reach conflicting conclusions” regarding the desirability of international exhaustion). International exhaustion subjects copyright-protected goods to competition from lower priced imports and, to that extent, benefits consumers. Correspondingly, copyright owners profit from a national-exhaustion regime, which also enlarges the monetary incentive to create new copyrightable works. See Forsyth & Rothnie 432–437 (surveying arguments for and against international exhaustion).
Weighing the competing policy concerns, our Government reached the conclusion that widespread adoption of the international-exhaustion framework would be inconsistent with the long-term economic interests of the United States. See Brief for United States as Amicus Curiae in Quality King, O. T. 1997, No. 96–1470, pp. 22–26 (hereinafter Quality King Brief).15 Accordingly, the United States has steadfastly “taken the position in international trade negotiations that domestic copyright owners should . . . have the right to prevent the unauthorized importation of copies of their work sold abroad.” Id., at 22. The United States has “advanced this position in multilateral trade negotiations,” including the negotiations on the TRIPS Agreement. Id., at 24. See also D. Gervais, The TRIPS Agreement: Drafting History and Analysis §2.63, p. 199 (3d ed. 2008). It has also taken a dim view of our trading partners’ adoption of legislation incorporating elements of international exhaustion. See Clapperton & Corones, Locking in Customers, Locking Out Competitors: Anti-Circumvention Laws in Australia and Their Potential Effect on Competition in High Technology Markets, 30 Melbourne U. L. Rev. 657, 664 (2006) (United States expressed concern regarding international-exhaustion legislation in Australia); Montén, Comment, The Inconsistency Between Section 301 and TRIPS: Counterproductive With Respect to the Future of International Protection of Intellectual Property Rights? 9 Marq. Intellectual Property L. Rev. 387, 417–418 (2005) (same with respect to New Zealand and Taiwan).
V
I turn now to the Court‘s justifications for a decision difficult to reconcile with the
A
The Court asserts that its holding “is consistent with antitrust laws that ordinarily forbid market divisions.” Ante, at 32. See also ante, at 18 (again referring to antitrust principles).
The Court sees many “horribles” following from a holding that the
1
Recognizing that foreign-made copies fall outside the ambit of
In Bobbs-Merrill, the Court addressed the scope of the statutory right to “ven[d].” In granting that right, the Court held, Congress did not intend to permit copyright owners “to fasten . . . a restriction upon the subsequent alienation of the subject-matter of copyright after the owner had parted with the title to one who had acquired full dominion over it and had given a satisfactory price for it.” 210 U. S., at 349–350. “[O]ne who has sold a copyrighted article . . . without restriction,” the Court explained, “has parted with all right to control the sale of it.” Id., at 350. Thus, “[t]he purchaser of a book, once sold by authority of the owner of the copyright, may sell it again, although he could not publish a new edition of it.” Ibid.
Under the logic of Bobbs-Merrill, the sale of a foreign-manufactured copy in the United States carried out with the copyright owner‘s authorization would exhaust the copyright owner‘s right to “vend” that copy. The copy could thenceforth be resold, lent out, or otherwise redistributed
Thus, in accord with Bobbs-Merrill, the first authorized distribution of a foreign-made copy in the United States exhausts the copyright owner‘s distribution right under
For example, if Wiley, rather than Kirtsaeng, had imported into the United States and then sold the foreign-made textbooks at issue in this case, Wiley‘s
This line of reasoning, it must be acknowledged, significantly curtails the independent effect of
In any event, the reading of the
2
Other statutory prescriptions provide further protection against the absurd consequences imagined by the Court. For example,
The Court also notes that amici representing art museums fear that a ruling in Wiley‘s favor would prevent museums from displaying works of art created abroad. Ante, at 22 (citing Brief for Association of Art Museum Directors et al.). These amici observe that a museum‘s right to display works of art often depends on
The Court worries about the resale of foreign-made consumer goods “contain[ing] copyrightable software programs or packaging.” Ante, at 21. For example, the Court observes that a car might be programmed with diverse forms of software, the copyrights to which might be owned by individuals or entities other than the manufacturer of the car. Ibid. Must a car owner, the Court asks, obtain permission from all of these various copyright owners before reselling her car? Ibid. Although this question strays far from the one presented in this case and briefed by the parties, principles of fair use and implied license (to the extent that express licenses do not exist) would likely permit the car to be resold without the copyright owners’ authorization.25
Most telling in this regard, no court, it appears, has been called upon to answer any of the Court‘s “horribles” in an actual case. Three decades have passed since a federal court first published an opinion reading
The Court provides a different explanation for the absence of the untoward consequences predicted in its opinion—namely, that lower court decisions regarding the scope of
VI
To recapitulate, the objective of statutory interpretation is “to give effect to the intent of Congress.” American Trucking Assns., 310 U. S., at 542. Here, two congressional aims are evident. First, in enacting
Rather than adopting the very international-exhaustion rule the United States has consistently resisted in international-trade negotiations, I would adhere to the national-exhaustion framework set by the