Background
Supap Kirtsaeng was a Thai student studying at Cornell University and later USC who discovered that John Wiley & Sons published international editions of American textbooks in Thailand and other Asian markets at dramatically lower prices than their U.S. counterparts — in many cases a tenth of the U.S. price for the same or substantially similar content. Kirtsaeng asked his family members to buy copies of the international editions in Thailand and mail them to him in the United States, where he resold them on eBay to students at prices below the U.S. editions but above his cost. John Wiley sued for copyright infringement.
Kirtsaeng defended under § 109 of the Copyright Act — the first sale doctrine — which provides that the owner of a lawfully made copy may sell or otherwise dispose of that copy without the copyright owner’s permission. The key question was whether “lawfully made under this title” required that the copy be manufactured in the United States, or whether it encompassed any lawfully made copy regardless of where it was manufactured. The district court and Second Circuit ruled against Kirtsaeng, following the Ninth Circuit’s Omega v. Costco geographic limitation.
The Court’s Holding
The Supreme Court reversed 6-3. Justice Breyer, writing for the majority, held that “lawfully made under this title” means “lawfully made in accordance with the Copyright Act’s requirements” — not “made in the United States.” The phrase modifies the legality of the manufacturing and sale, not the location. A copy is lawfully made under the Copyright Act if its manufacture and first sale was authorized by the copyright holder — regardless of where that authorization occurred geographically. Accordingly, Kirtsaeng’s textbooks, manufactured and first sold abroad by Wiley or with Wiley’s authorization, triggered the first sale doctrine upon their initial authorized sale, and downstream resales in the United States were protected.
The majority relied heavily on the absurdity of the geographic alternative: limiting § 109 to U.S.-manufactured goods would mean that U.S. libraries could not lend foreign-manufactured books, museums could not resell donated foreign-manufactured goods, and second-hand stores could not sell foreign-manufactured products containing copyrighted content without the copyright holder’s permission — results Congress surely did not intend.
Key Takeaways
- The copyright first sale doctrine (§ 109) applies to copies lawfully manufactured anywhere in the world, not just in the United States — the phrase “lawfully made under this title” means “made with the copyright holder’s authorization,” not “made in the U.S.”
- Authorized foreign sales exhaust the copyright holder’s right to control downstream distribution in the United States — parallel importers who purchase genuine goods abroad and resell them in the U.S. are not copyright infringers.
- Copyright holders cannot use geographic first sale doctrine limitations to price-discriminate between international markets — if they sell authorized copies abroad at lower prices, those copies can be legally imported and resold domestically.
- The decision had major commercial significance for the academic publishing, consumer electronics, and software industries, which had relied on international price discrimination strategies predicated on the geographic limitation.
Why It Matters
Kirtsaeng v. John Wiley resolved the most significant circuit split in copyright law of the 2000s and had immediate commercial consequences for industries with globally dispersed pricing strategies. For the academic publishing industry, the ruling validated the gray market in international textbook editions that had been growing rapidly, constraining publishers’ ability to charge dramatically different prices in different markets for the same copyrighted content. For copyright holders generally, the decision confirmed that international price differentiation strategies must be enforced through contract and licensing conditions — not through copyright law’s distribution right.
The Kirtsaeng decision also set the stage for the parallel patent exhaustion ruling in Impression Products v. Lexmark (2017), which extended global first-sale exhaustion from copyright to patent law. Together, the two cases established a consistent framework of international IP exhaustion across the two most important IP regimes, significantly limiting rights holders’ ability to use intellectual property law to maintain geographic market segmentation in an era of global commerce and online marketplaces.