The US Supreme Court will hear arguments on Monday in a case that examines whether a California student who sold textbooks made in Thailand over eBay violated laws that govern the resale of foreign-made goods in the US.
Retail and ecommerce companies, which sell or facilitate the sale of billions of dollars worth of international goods in the US, are watching the case closely for a decision that could give manufacturers greater control over how their products are distributed in the global market.
“This case is an attempt by some brands to manipulate copyright law,” said Hillary Brill, global policy counsel for eBay, who is not a party to the case. “Ebay’s position is straightforward: if you buy a legitimate, authentic good, then you own it, plain and simple. You have a right to sell it, lend it or give it away.”
The case involves Supap Kirtsaeng, a graduate student in California, who asked family members to buy and send him textbooks from his native Thailand, where they were priced much lower than in the US. He then resold the books on eBay for a profit.
During the trial, Mr Kirtsaeng said he had sold $900,000 worth of books, covering 500 titles.
Eight of those titles were published by the Asian subsidiary of John Wiley & Sons, the New York-based publishing house that later sued Mr Kirtsaeng for wilfully violating copyright law.
For goods made in the US, a provision of federal law called the first-sale doctrine allows the owner of the goods to resell them without the permission of the copyright owner. Wiley argued that the doctrine did not apply to books manufactured abroad, and that operations such as Mr Kirtsaeng’s undercut its business and the ability to price goods differently for foreign markets.
The lower court agreed with Wiley and ordered Mr Kirtsaeng to pay $600,000 in damages to the publisher.
“Those seeking to profit from the creative works of others cannot evade our intellectual property laws by importing copies from overseas,” the company said at the time.
Mr Kirtsaeng appealed and now the Supreme Court will decide if the first-sale doctrine applies to foreign-made goods. A similar case reached the court in 2010, but was deadlocked in a 4-4 vote because Justice Elena Kagan had recused herself from the case. She could be the tiebreaker in the Kirtsaeng case.
Various coalitions of online retailers have been rallying in support of Mr Kirtsaeng.
Mark Griffin, the general counsel for Overstock.com, which sells clothing, furniture, and electronics, said a decision in favour of Wiley would shift the burden of policing for copyrighted goods on to online retailers such as Overstock.
“That is a very impractical burden to lay on a burgeoning industry,” he said. “This is a step backwards in intellectual property and how ownership rights are treated.”
Internet companies made a similar argument in the debates against SOPA, the Stop Online Piracy Act, and PIPA, the Protect Intellectual Property Act, legislation backed by the publishing and entertainment industries that would have held liable the sites that hosted or linked to pirated content. A strong backlash from the internet industry caused lawmakers to table the legislation until after the November election.