By , November 08, 2012.

If you get confused reading about Kirtsaeng v John Wiley & Sons, the Supreme Court case argued last week involving copyright’s importation provisions and the first sale doctrine, you are not alone. Resolving the issue requires wading through a morass of interdependent statutory provisions. Add previous Supreme Court precedent, and you end up with, in the words of Chief Justice Roberts, “an awfully difficult maze.”

I would suggest that there is an easy way out of this difficult maze (though as explained below, unlikely to be adopted by the Supreme Court in its eventual opinion): interpret “import” as independent from a sale or other disposition. (I briefly discussed this idea in More on Kirtsaeng v John Wiley & Sons.)

The first sale doctrine, codified in 17 USC § 109(a), gives the owner of a particular copy the ability “to sell or otherwise dispose of the possession of that copy.” The argument in Kirtsaeng treats this language as including the ability to import a particular copy, so how this language interacts with § 602’s prohibition on importation of copies “that have been acquired outside the United States” turns on how the Supreme Court chooses to interpret the phrase “lawfully made under this title” in the first sale doctrine.

But if the act of importation is distinct from the act of selling or otherwise disposing, than everything lines up neatly. This interpretation offers a number of advantages.

First, it is consistent with the plain language of the relevant statutory provisions. Section 602 applies to both nonpiratical and piratical copies acquired outside the US. Interpreting the first sale doctrine to include overseas sales of copies made overseas would render much of § 602 superfluous and its exceptions — listed in 17 USC § 602(a)(3) — meaningless.

Second, it is consistent with the legislative intent of both the first sale doctrine and the importation prohibition. The House Report on the Copyright Act of 1976, to give just one example, clearly states that:

The second situation covered by section 602 is that where the copies or phonorecords were lawfully made but their distribution in the United States would infringe the U.S. copyright owner’s exclusive rights. As already said, the mere act of importation in this situation would constitute an act of infringement and could be enjoined. 1H.R. No. 94-1476, 169 (1976).

Third, this interpretation would allay concerns raised by Kirtsaeng and several amici that “a copyright owner could make copies abroad, import them into the United States and sell them subject to onerous restrictions on resale, and then obtain copyright remedies from buyers who disregard those restrictions.” But if it is only the act of unauthorized importation that triggers § 602, then an authorized importation would eliminate any liability for downstream users and resellers.

Is Importation a disposition?

The argument that the act of importation should be treated independently of the acts protected by the first sale doctrine is not in front of the Supreme Court in Kirtsaeng. However, it was made in 1998, when the Court heard Quality King v L’anza, a case involving similar issues concerning the first sale doctrine and § 602.

It was primarily raised by the United States, acting as amicus curiae. In its brief, the US argued:

The first sale doctrine does not divest the copyright owner of its right to prevent unauthorized importations. Petitioner’s argument proceeds from the assumption that a first sale abroad completely exhausts a copyright owner’s distribution right. Nothing in Section 109(a)’s text, however, suggests that the limitation on rights effected by a first sale is coextensive with the entire distribution right defined by Section 106(3). To the contrary, Section 109(a) allows the owner of a copy only “to sell or otherwise dispose of the possession of that copy” without the authority of the copyright owner. Because the “mere act of importation”  regulated by Section 602(a) does not entail a sale or disposal of possession by the owner of a copy, the first sale doctrine offers petitioner no safe harbor.

Among the other amici who filed briefs in Quality King, various trade associations — the RIAA, MPAA, Association of American Publishers, American Film Marketing Association, Business Software Alliance, Interactive Digital Software Association, National Music Publishers’ Association, and International Intellectual Property Alliance — also argued this point (coincidentally, this brief was authored by Theodore Olson, who argued on behalf of John Wiley & Sons last Monday):

The language of section 109(a) and the structure of the Copyright Act establish that the first sale doctrine is not a defense to unauthorized acts of importation.

First, section 109 by its terms only allows an owner of a particular tangible copy of a copyrighted work to “sell or otherwise dispose of the possession of the copy or phonorecord.” It does not grant the owner of that copy the right to import the copy into the United States. Importation is distinct from sale or disposition. As noted, importation entails only the carrying of copies or goods across borders, and does not, by definition, necessarily involve sale or transfer of possession.

If importation were not distinct from sale or distribution, there would be no need for section 602: Unauthorized sale or other disposition of possession of imported copies in the United States would be, and is, actionable by a copyright owner under section 106(3). Moreover, there would be no need for the various exceptions to section 602(a) liability expressly set forth by Congress. In particular, there would be no need for the exception to section 602(a) which allows unauthorized importation of copies “forming part of [a] person’s personal baggage” if such copies are “for the private use of the importer and not for distribution.” Importation of a few copies “for private use and not for distribution” cannot, by definition, constitute a distribution “to the public.” If importation were a form of sale or other distribution, or otherwise limited by the first sale doctrine, the “private use” exception to the importation right would be wholly superfluous.

Quality King, the distributor seeking protection under the first sale doctrine, responded to these arguments in its reply brief, arguing that the meaning of disposition should not be read so narrowly:

The terms of Section 109(a) are quite broad: they allow any owner of a copy made lawfully under U.S. copyright law (and it is undisputed that Quality King is such a person) to sell “or otherwise dispose of the possession” of that copy. As this Court has noted, “‘the expression ‘dispose of’ is very broad, and signifies more than ‘to sell.’ Selling is but one mode of disposing of property.'” And as even the Government notes, the term “dispose of” means, among other things, “to transfer,” –a meaning that is plainly broad enough to include the act of transporting from one country to another. Section 109(a) was plainly intended to immunize more activities than those listed in Section 106(3) itself, and importation is a principal example of such an activity. A disposal of possession of any article could include the article’s transport, delivery, export or import, and there is no exception to Section 109(a) when an importation is part of the transaction by which a lawfully obtained article is “disposed of.” Moreover, very few situations covered by Section 602(a) would not entail selling or disposing of the possession of the imported item–whether to a shipper or the ultimate recipient–and there is no allegation that this case presents such a situation.

During oral arguments in front of the Supreme Court, the question of whether importation was included within the scope of otherwise disposing came up only briefly, in the following exchange:

[JUSTICE GINSBURG]: There’s one other language point that the Government makes in addition to its 501 argument.

It refers to the later provision, the one in the… what is it, the chip, the 905 and 906, and that 906 includes… 906(b) refers not simply to otherwise dispose, but includes the word, import, and the argument is, and when Congress… Congress knows there’s a difference between importing and otherwise disposing.

In the end, Quality King appears to have convinced the Court. It summarily rejected the argument that importation is not a form of disposition in its opinion:

Whether viewed from the standpoint of the importer or from that of the copyright holder, the textual argument advanced by the Solicitor General—that the act of “importation” is neither a sale nor a disposal of a copy under § 109(a)—is unpersuasive. Strictly speaking, an importer could, of course, carry merchandise from one country to another without surrendering custody of it. In a typical commercial transaction, however, the shipper transfers “possession, custody, control and title to the products” to a different person, and L’anza assumes that petitioner’s importation of the L’anza shipments included such a transfer. An ordinary interpretation of the statement that a person is entitled “to sell or otherwise dispose of the possession” of an item surely includes the right to ship it to another person in another country.

If you read this carefully, you should be able to quickly spot the flaws in the Court’s logic. The act of importation is not a disposition, but “in a typical commercial transaction” there is a disposition, therefore the act of importation is a disposition. At the very least, the Court’s conclusion seems an awkward shoehorning of one act into the definition of another.

The Better Definition?

Reading “importation” as distinct from “otherwise dispose” seems the better interpretation for several reasons.

First, the Supreme Court’s interpretation renders the definition of disposition in the first sale doctrine inconsistent with other provisions in the Copyright Act. As Justice Ginsburg points out, § 906(b), dealing with limitations on exclusive rights of semiconductor chip products, reads, in pertinent part, “the owner of a particular semiconductor chip product made by the owner of the mask work … may import, distribute, or otherwise dispose of or use, but not reproduce, that particular semiconductor chip product.” Like the language of the first sale doctrine, § 906 includes to “otherwise dispose”; however, it adds an explicit reference to importation. Under the Supreme Court’s interpretation, this language is superfluous and redundant.

Likewise, provisions outside the Copyright Act explicitly refer to importation alongside disposition. For example, 18 USC § 2320, dealing with trafficking in counterfeit goods or services, defines “trafficking” as “to transport, transfer, or otherwise dispose of, to another, for purposes of commercial advantage or private financial gain, or to make, import, export, obtain control of, or possess, with intent to so transport, transfer, or otherwise dispose of.”

I think this shows, as Ginsburg remarked, that “Congress knows there’s a difference between importing and otherwise disposing.” The Supreme Court’s decision in Quality King, however, rendered the first sale’s definition of otherwise disposing an anomaly — it includes “importation” while virtually every other instance mentions importation separately from otherwise disposing.

Finally, while treating importation as synonymous with otherwise disposing might be supported through linguistic gymnastics, treating the two independently produces the better result. The former leads us into the “difficult maze” the Court currently finds itself in; the latter provides a consistent and felicitous operation of all relevant statutory provisions.


As noted above, this argument has not been made by any of the parties in Kirtsaeng v John Wiley & Sons. And it’s doubtful it would have been successful even if it had been made, as it would require overturning, at least in part, Quality King — a unanimous decision. While the Supreme Court can overturn its own prior rulings, it is rare. 2See Planned Parenthood v Casey, 505 US 833, 854-55 (1992), discussing four factors that should guide the Court when it is deciding whether to overturn a prior holding.

However, while Quality King was a unanimous decision, it’s difficult to find many fans of it. Take a look at the following exchange during Kirtsaeng oral arguments:

JUSTICE KAGAN: Mr. Rosenkranz, there is that passage in Quality King, which is, I think it’s fair to say, unfortunate to your position. Is your basic view of that passage that it was simply ill-considered dicta that we should ignore?

MR. ROSENKRANZ: To put it bluntly, yes.

Interestingly, Justice Sotomayor has broached the topic of overturning Quality King not only during arguments for Kirtsaeng, but also during arguments for Costco v Omega in 2010, which concerned essentially the same issue as here.

Here is Justice Sotomayor during Costco oral arguments:

JUSTICE SOTOMAYOR: Then you are trying to rewrite Quality King. Now you are saying that the entire premise of Quality King is wrong.

MR. PANNER: Not at all, Your Honor, because in Quality King, what the Court held was that a copy that is made in the United States is lawfully made under this title.

And during oral arguments for Kirtsaeng:

JUSTICE SOTOMAYOR: So you get what you wanted anyway. That’s really the bottom line. We undo Quality King, except that the price is that people have to ship their manufacturing abroad.

MR. STEWART: Well, we’re not urging the Court to take that course, but yes, that would have been one way to accomplish the same objective.

I wouldn’t recommend reading too much into these questions — finding meaning in the questions asked during oral arguments is like reading tea leaves — but it is interesting to note that the thought of revisiting Quality King seems to at least have been on Justice Sotomayor’s mind for the past two years.


1 H.R. No. 94-1476, 169 (1976).
2 See Planned Parenthood v Casey, 505 US 833, 854-55 (1992), discussing four factors that should guide the Court when it is deciding whether to overturn a prior holding.