Will the recent case involving the first sale doctrine and foreign-made works have any impact on libraries?

The case is John Wiley & Sons v. Kirtsaeng, 654 F.3d 210 (2d Cir. 2011), and involves what is referred to as "gray market goods." The court ruled that Kirtsaeng infringed Wiley's copyrights when he imported and sold in the United States cheap foreign editions of the publisher's textbooks sent to him by his family from Thailand. Two sections of the Copyright Act are relevant in this case. Section 602(a) says that importation into the United States without the authority of the copyright owner of copies of works acquired outside the country is an infringement of the exclusive right of distribution. However, the first sale doctrine, section 109(a), permits the sale, lending, and so forth of lawfully acquired copies. So, the question is whether these copies are "lawfully acquired." The Second Circuit held that section 109(a)'s first sale doctrine does not apply to works manufactured outside of this country, which means that publishers can prevent their importation.

Publishers often produce cheaper copies of their works using less expensive paper and binding, then sell them abroad at a reduced price. This holding represents a disagreement among the circuits concerning application of the first sale doctrine to foreign works. The Ninth Circuit earlier held in Omega S. A. v. Costco Wholesale Corp., 541 F.3D 982 (9th Cir. 2008), that a producer could prevent importation of their works, but only if the works were manufactured abroad. This case holds that the first sale applies, no matter where the work is manufactured and regardless of where the sale takes place.

Costco had an exception for libraries, and the decision should not restrict the first sale doctrine for books manufactured abroad and imported into the United States. Kirtsaeng contained no such exception. The U.S. Supreme Court has granted certiorari and will decide whether copies of copyrighted works made and legally acquired abroad, which are then imported into the United States, are covered by the first sale doctrine. Should the Second Circuit decision be upheld, libraries are concerned that the first sale doctrine is at risk. After all, that doctrine is how libraries lend work in their collections. If a publisher wants to control application of the first sale doctrine, it could move manufacturing offshore, which would have the effect of eliminating the doctrine for libraries. Thus, the potential impact on libraries is enormous.

Why are textbook companies objecting to the production of electronic textbooks? There was a news report about a case involving this.

In March 2012 there was a report of a suit filed in the Southern District of New York for copyright infringement by three of the largest textbook publishers in the United States (Pearson Education, Cengage Learning, and Bedford, Freeman & Worth Publishing Group) against Boundless Learning (see http: //dockets.justia.com/docket/new-york/ nysdce/1:2012cv01986/393501/). Boundless is representative of the open education movement, which intentionally injects materials into the public domain so that they may be used freely by teachers and students. Boundless raised approximately $10 million and began to develop and make available basic textbooks. The publishers claim that Boundless is creating and distributing free replacement copies of their works that mirror not only the substance but also the organization, selection, and layout of popular college textbooks.

The case will turn on whether the authors of the published textbooks created original works since textbooks are compilations. The originality bar is set pretty low in U.S. copyright law, so publishers must exhibit selection, organization, and presentation of facts in a sufficiently creative and unique way. Boundless is defending on the basis that the content of its replacement textbooks are factual and come from open education resources. Publishers disagree and claim that there is enough creativity to qualify for copyright protection, which includes the decisions about the information and topics to include, the order of presentation of the topics, and the manner in which the textbook emphasizes and presents the topics.

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