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Los Angeles Copyright Infringement Attorney | Supreme Court Decision Could Keep Some Green in the Gray Market

  • By: Robert Klein

Kirtsaeng v. John Wiley & Sons, Inc., a case heard by the US Supreme Court last October, was such an important copyright infringement matter. The decision in this case was thought to carry potentially devastating implications for individuals and businesses involved in the “gray market,” the trade of commodities through irregular although not necessarily illegal methods.

Supap Kirtsaeng was astonished to learn that textbooks were considerably more expensive than they sold for in his native Thailand when the graduate student came to the United States in 1997 to study at Cornell University. Kirtsaeng asked his relatives in Thailand to buy the books and ship them to him before he sold them on the online auction website eBay. According to court documents, Kirtsaeng testified that he earned $900,000 in revenues, although his PayPal revenues showed $1.2 million.

John Wiley & Sons, Inc., a publisher of numerous academic and educational journals, including textbooks, filed a lawsuit against Kirtsaeng for copyright infringement, trademark infringement and unfair competition, among other charges. A Manhattan federal jury found Kirtsaeng liable for copyright infringement and awarded Wiley & Sons $600,000, and the New York-based 2nd US Circuit Court of Appeals upheld the jury award. There was tremendous interest in the Supreme Court’s interpretation because the Justices were deadlocked 4-4 in a similar 2010 copyright dispute between Costco and Swatch Group AG’s Omega unit over discounted watches. Supreme Court Justice Elena Kagan had recused herself from that case because of her previous involvement as an Obama administration lawyer and was expected to be a swing vote in Kirtsaeng v. John Wiley & Sons.

Instead, the Supreme Court threw out the $600,000 jury decision in a 6-3 decision issued on March 19. The majority ruled that the first sale doctrine of Section 109(a) of the Copyright Act applies to copies of a copyrighted work lawfully made abroad. Unlike the frequent 5-4 verdicts that are decided along politically ideological lines, Justice Stephen Breyer authored the majority opinion, joined by Chief Justice John Roberts, Justice Sonia Sotomayor and Justice Clarence Thomas. Bloomberg News reported that Justice Kagan joined the majority but wrote separately that “Congress might want to revisit the issue to give manufacturers and publishers more power to control sales of their products,” an opinion that was joined by Justice Samuel Alito. Justices Ruth Bader Ginsburg, Anthony Kennedy and Antonin Scalia dissented.

Interestingly, the day after the Supreme Court issued its decision, the head of the US Copyright Office, Maria Pallante, told a Congressional committee that the United States needs to reform copyright law and everything should be on the table. “A few years of solid drafting and revision is what you’re really looking at if you want to do something,” Pallante told the House Subcommittee on Courts, Intellectual Property and the Internet, with Wired magazine reporting that her suggestions included bolstering criminal penalties for copyright infringement. “Exclusive rights will just not be meaningful if there is no way to enforce them.”

As the United States examines and refines its copyright laws, you will want to work with a Los Angeles business litigation lawyer who understands the best ways to help you secure the most favorable outcome in your own intellectual property dispute. We have additional information about unfair competition available on our website, and you can complete the form on this page or you can contact our firm at (323) 653-3900 to have our Los Angeles copyright infringement lawyerreview your case.

Klein Trial Lawyers – Los Angeles business litigation attorneys

Robert Klein

About the Author Attorney Robert Klein is a former CPA and known for
finding creative solutions to complex business lawsuits.