Libraries Say Decision Threatens Lending Rights

In Supreme Court Filing, Libraries Say Decision in Wiley Suit Threatens Lending Rights
by Andrew Albanese - Publishers Weekly
Jul 05, 2012

It is libraries’ inability to acquire and lend e-books that has grabbed the headlines, but according to an amicus brief filed with the Supreme Court on July 3, libraries’ ability to lend print books is also under threat. The brief, filed in connection with the case Kirtsaeng v. Wiley & Sons challenges a 2011 Second Circuit Court of Appeals decision holding that the doctrine of first sale, the provision in the Copyright Act that allows any purchaser of a legal copy of a book or other copyrighted work to sell or lend that copy, applies only to copies manufactured in the United States. If left to stand, the library community says the ruling could strip libraries of their first-sale right to lend copies of works made abroad. 

In its brief, the Library Copyright Alliance, a coalition of three major library groups (ALA, ARL, and the ACRL) asks the Supreme Court to reverse the Second Circuit, and apply first-sale doctrine to all copies “manufactured with the lawful authorization of the holder of a work’s US copyright.”

In a recent interview with PW, lawyer Jonthan Band, who authored the LCA brief, said a ruling upholding the Second Circuit’s interpretation of First Sale would be “a blow to the heart of the library enterprise,” because it would mean libraries conceivably could not lend books that were printed abroad. “Not only books from foreign publishers,” Band explained, “but American-published books that are merely printed overseas.” The LCA brief notes that a significant portion of U.S. library collections consist of resources that were manufactured overseas, and more than 200 million books in U.S. libraries have foreign publishers.

The Supreme Court case stems from a ruling in John Wiley & Sons, Inc. v. Supap Kirtsaeng, in which Kirtsaeng, a Thai-born U.S. student was successfully sued by Wiley for importing and reselling foreign editions of Wiley textbooks made for exclusive sale abroad, in the U.S. market. In its verdict, a three-judge panel of the Second Circuit affirmed by a 2-1 margin that Kirtsaeng “could not avail himself of the first sale doctrine,” because language in the statute says that products must be “lawfully made.” The court ruled that those two words—“lawfully made”—limits First Sale "specifically and exclusively to works that are made in territories in which the Copyright Act is law, and not to foreign-manufactured works."

That verdict was the second recent decision effectively limiting the First Sale doctrine. In December, 2010, the Supreme Court deadlocked 4-4 (with Justice Elena Kagan abstaining) in the case of Costco Wholesale Corporation v. Omega, S.A., the net effect of which was to affirm a Ninth Circuit Court of Appeals decision that enjoined big-box store Costco from selling copyrighted, foreign-made Omega watches, authorized for sale only in foreign territories, in the U.S. market. Because the Supreme Court deadlocked, however, the Ninth Circuit ruling is non-binding on other circuits.

However, "the Second Circuit’s decision is actually worse than the Ninth Circuit’s decision in Costco," explained Band in a blog post because the Ninth Circuit ruled that First Sale still applied to a foreign manufactured copy if it was imported “with the authority of the U.S. copyright owner.” In other words, if a library bought a book in the U.S. from a U.S. publisher, and that book happened to be printed in China, a library under the Ninth Circuit interpretation would have the right under First Sale to lend that book. “Unfortunately, the Second Circuit rejected this exception as not having a foundation in the First Sale Doctrine language,” Band notes.

In the LCA brief, the library groups acknowledge that libraries could likely still assert the right to lend foreign-manufactured books based on other, more limited exceptions in the Copyright Act, such as "fair use or implied license," but it is "far from certain" that libraries could "always assert those defenses successfully." More likely, the uncertainty the Second Circuit interpretation would create for libraries could deter many libraries from lending materials in question. "While most copyright owners probably would not sue a library for lending a lawfully acquired copy of a foreign printed book," Band acknowledged, "libraries will not engage in conduct that is technically unlawful just because there is a low probability of litigation."