Section 109(a) of the Copyright Act provides, in part, that
...the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.Emphasis is mine. Contrast that with Section 602(a)(1) which states that
[i]mportation 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....As you can probably tell from reading these two relevant provisions, they appear to contradict one another. The first provision delineates the first-sale doctrine. This limits the rights of copyright holders and enables secondary markets by permitting resale without authority of the copyright owner. The second provision prohibits the importation of a work without the authority of the copyright’s owner.
This is the question presented in the case of Kirtsaeng v. John Wiley & Sons, Inc., which was argued before the Supreme Court on October 29. The Second Circuit summarized the facts:
To help subsidize the cost of his education, Kirtsaeng allegedly participated in the following scheme: Between 2007 and September 8, 2008, Kirtsaeng's friends and family shipped him foreign edition textbooks printed abroad by Wiley Asia. In turn, Kirtsaeng sold these textbooks on commercial websites....The Supreme Court has already considered a very similar case in Quality King Distributors Inc., v. L'anza Research International Inc., 523 U.S. 135 (1998). In summary:
L'anza, a California manufacturer, sells its hair care products in this country exclusively to distributors who have agreed to resell within limited geographic areas and only to authorized retailers. L'anza promotes its domestic sales with extensive advertising and special retailer training. In foreign markets, however, it does not engage in comparable advertising or promotion; its foreign prices are substantially lower than its domestic prices. It appears that after L'anza's United Kingdom distributor arranged for the sale of several tons of L'anza products, affixed with copyrighted labels, to a distributor in Malta, that distributor sold the goods to petitioner, which imported them back into this country without L'anza's permission and then resold them at discounted prices to unauthorized retailers.
Omega manufactures watches in Switzerland and sells them globally through a network of authorized distributors and retailers. Engraved on the underside of the watches is a U.S.-copyrighted “Omega Globe Design.” Costco obtained watches bearing the copyrighted design from the “gray market” 1 in the following manner: Omega first sold the watches to authorized distributors overseas. Unidentified third parties eventually purchased the watches and sold them to ENE Limited, a New York company, which in turn sold them to Costco. Costco then sold the watches to consumers in California. Although Omega authorized the initial foreign sale of the watches, it did not authorize their importation into the United States or the sales made by Costco.
From a textual perspective, there are three canons that immediately come to mind when considering this question:
- Harmonious-Reading Canon. The provisions of a text should be interpreted in a way that renders them compatible, not contradictory (p. 180).
- General/Specific Canon. If there is a conflict between a general provision and a specific provision, the specific provision prevails (generalia specialibus non derogant, p. 183).
- Irreconcilability Canon. If a text contains truly irreconcilable provisions at the same level of generality, and they have been simultaneously adopted, neither provision should be given effect (p. 189).
In arriving at a satisfactory textual interpretation of the statutory language at issue, we focus primarily on the words "made" and "under," but this task is complicated by two factors: (1) the word "made" is not a term of art in the Copyright Act, and (2) "[t]he word `under' is [a] chameleon" and courts "must draw its meaning from its context." Wiley contends that we must interpret "lawfully made under this title" to mean "lawfully made in the United States." This view of the law — which was also adopted by the United States in its amicus brief before the Supreme Court in Costco — is certainly consistent with the text of § 109(a).