The Supreme Court recently handed down its decision in Kirtsaeng v. John Wiley & Sons, a copyright exhaustion case concerning the sale of “gray-market” works published outside the United States and imported for sale. In a surprisingly decisive 6-3 decision, the Court reversed the Second Circuit’s decision and held that the first sale doctrine applies to copyrighted works lawfully produced abroad.
The facts of the case center around the actions of a student by the name of Sarap Kirtsaeng, who sold “gray-market” textbooks imported from Thailand beginning in 1997. Kirtsaeng, who did business on eBay under the handle “Bluechristine99,” set up a very lucrative online business wherein his relatives sent him textbooks from Thailand that he then sold to students in the U.S. Since textbooks are significantly less expensive in Thailand than in the U.S., Kirtsaeng was able to realize a tidy profit of roughly $100,000—and effectively subsidize an undergraduate degree from Cornell University and a Ph.D. in math from the University of Southern California. U.S. publishers caught wind of Kirtsaeng’s business and were not amused. John Wiley filed suit and won in federal district court; the Second Circuit later affirmed, setting up a showdown in the Supreme Court.