Gesmer Updegrove LLP

March 2013

Supreme Court First-Sale Ruling Favors Gray Market Importers of Copyrighted Works, But Is Likely Only One Round in an Ongoing Battle Over the Right to Exclude Imported Works

by Lee Gesmer on March 20, 2013

Supreme Court First-Sale Ruling Favors Gray Market Importers of Copyrighted Works, But Is Likely Only One Round in an Ongoing Battle Over the Right to Exclude Imported Works

Last week I published a post on the lawsuit challenging the “first-sale” doctrine in the context of digital files. On Tuesday the Supreme Court issued a decision holding that the first-sale doctrine applies to copies of copyrighted works lawfully made abroad.

To understand the facts of this case picture this scenario.

You are a student in Thailand, and you use English-language textbooks in your studies there. You see that the textbooks are not pirated copies—they are legal copies, authorized for foreign publication. When you come to the United States to continue your education you see the same textbooks are sold at much higher prices. Why not get ahold of some of the books being sold in Thailand and sell them at below-U.S. prices but above Thailand prices? There is money to be made there!

Math student Supap Kirtsaeng recognized this arbitrage opportunity. He asked his family in Thailand to buy copies of foreign edition English language textbooks at Thai book shops and ship them to him in the U.S.… Read the full article

Copyright, Redigi and the Star Trek Transporter

by Lee Gesmer on March 14, 2013

Copyright, Redigi and the Star Trek Transporter

Last week’s New York Times article on digital resales, Imagining a Swap Meet for E-Books and Music, is a reminder that U.S. District Court Judge Richard Sullivan’s decision on the pending cross-motions for summary judgment in Capitol v. Redigi can be expected quite soon. The motions were argued on October 5, 2012 (transcript), and six months is a fairly long time for a judge to decide motions of this sort. (For my earlier blog post on this case see Redigi Case Poses A Novel Copyright Question on the Resale of Digital Audio Files – Is “Digital First Sale” Legal?)

Ever since copyright protection began to be applied to software in the early 1980s the industry has complained that the law lags behind the technology. The Redigi case is another example of this lag. The hearing transcript illustrates the difficulty of applying copyright law to new digital technologies, as the lawyers and the judge stuggle to find an analogy that will help them apply the copyright “first sale” doctrine to the Redigi “forward and delete” system.… Read the full article