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SUPREME COURT OF THE UNITED STATES
_________________
No. 11–697
_________________
SUPAP KIRTSAENG, dba BLUECHRISTINE99,
PETITIONER
v. JOHN WILEY & SONS, INC.
on writ of certiorari to the united states
court of appeals for the second circuit
[March 19, 2013]
Justice Breyer delivered the opinion of the
Court.
Section 106 of the Copyright Act grants
“the owner of copyright under this title” certain
“exclusive rights,” including the right “to
distribute copies . . . of the copyrighted work to the
public by sale or other transfer of ownership.” 17
U. S. C. §106(3). These rights are qualified,
however, by the application of various limitations set forth in the
next several sections of the Act, §§107 through 122.
Those sections, typically entitled “Limitations on exclusive
rights,” include, for example, the principle of “fair
use” (§107), permission for limited library archival
reproduction, (§108), and the doctrine at issue here, the
“first sale” doctrine (§109).
Section 109(a) sets forth the “first
sale” doctrine as follows:
“Notwithstanding the provisions of
section 106(3) [the section that grants the owner exclusive
distribution rights], the owner of a particular copy or phonorecord
lawfully made under this title . . . is entitled,
without the authority of the copyright owner, to sell or otherwise
dispose of the possession of that copy or phonorecord.”
(Emphasis added.)
Thus, even though §106(3) forbids
distribution of a copy of, say, the copyrighted novel Herzog
without the copyright owner’s permission, §109(a) adds
that, once a copy of Her- zog has been lawfully sold (or its
ownership otherwise lawfully transferred), the buyer of
that
copy and subsequent owners are free to dispose of it as they
wish. In copyright jargon, the “first sale” has
“exhausted” the copyright owner’s §106(3)
exclusive distribution right.
What, however, if the copy of Herzog was printed
abroad and then initially sold with the copyright owner’s
permission? Does the “first sale” doctrine still apply?
Is the buyer, like the buyer of a domestically manufactured copy,
free to bring the copy into the United States and dispose of it as
he or she wishes?
To put the matter technically, an
“importation” provision, §602(a)(1), says that
“[i]mportation into the United
States, without the authority of the owner of copyright under this
title
, of copies . . . of a work that have been
acquired outside the United States is an infringement of the
exclusive right to distribute copies . . .
under
section 106 . . . .” 17 U. S. C.
§602(a)(1) (2006 ed., Supp. V) (emphasis added).
Thus §602(a)(1) makes clear that importing
a copy without permission violates the owner’s exclusive
distri- bution right. But in doing so, §602(a)(1) refers
explicitly to the
§106(3) exclusive distribution right.
As we have just said, §106 is by its terms “[s]ubject
to” the various doctrines and principles contained in
§§107 through 122, in- cluding §109(a)’s
“first sale” limitation. Do those same modifications
apply—in particular, does the “first sale”
modification apply—when considering whether §602(a)(1)
prohibits importing a copy?
In
Quality King Distributors, Inc. v.
L’anza Research Int’l, Inc., 523 U.S.
135, 145 (1998), we held that §602(a)(1)’s reference
to §106(3)’s exclusive distribution right incorporates
the later subsections’ limitations, including, in particular,
the “first sale” doctrine of §109. Thus, it might
seem that, §602(a)(1) notwithstanding, one who buys a copy
abroad can freely import that copy into the United States and
dispose of it, just as he could had he bought the copy in the
United States.
But
Quality King considered an instance
in which the copy, though purchased abroad, was initially
manufactured in the United States (and then sent abroad and sold).
This case is like
Quality King but for one important fact.
The copies at issue here were manufactured abroad. That fact is
important because §109(a) says that the “first
sale” doctrine applies to “a particular copy or
phonorecord
lawfully made under this title.” And we
must decide here whether the five words, “lawfully made under
this title,” make a critical legal difference.
Putting section numbers to the side, we ask
whether the “first sale” doctrine applies to protect a
buyer or other lawful owner of a copy (of a copyrighted work)
lawfully manufactured abroad. Can that buyer bring that copy into
the United States (and sell it or give it away) without obtaining
permission to do so from the copyright owner? Can, for example,
someone who purchases, say at a used bookstore, a book printed
abroad subsequently resell it without the copyright owner’s
permission?
In our view, the answers to these questions are,
yes. We hold that the “first sale” doctrine applies to
copies of a copyrighted work lawfully made abroad.
I
A
Respondent, John Wiley & Sons, Inc.,
publishes aca- demic textbooks. Wiley obtains from its authors
various foreign and domestic copyright assignments, licenses and
permissions—to the point that we can, for present pur- poses,
refer to Wiley as the relevant American copyright owner. See 654
F.3d 210, 213, n. 6 (CA2 2011). Wiley often assigns to its
wholly owned foreign subsidiary, John Wiley & Sons (Asia) Pte
Ltd., rights to publish, print, and sell Wiley’s English
language textbooks abroad. App. to Pet. for Cert. 47a–48a.
Each copy of a Wiley Asia foreign edition will likely contain
language making clear that the copy is to be sold only in a
particular country or geographical region outside the United
States. 654 F. 3d, at 213.
For example, a copy of Wiley’s American
edition says, “Copyright © 2008 John Wiley & Sons,
Inc. All rights reserved. . . . Printed in the United
States of America.” J. Walker, Fundamentals of Physics, p. vi
(8th ed. 2008). A copy of Wiley Asia’s Asian edition of that
book says:
“Copyright © 2008 John Wiley
& Sons (Asia) Pte Ltd[.] All rights reserved. This book is
authorized for sale in Europe, Asia, Africa, and the Middle East
only and may be not exported out of these territories. Exportation
from or importation of this book to another region without the
Publisher’s authorization is illegal and is a violation of
the Publisher’s rights. The Publisher may take legal action
to enforce its rights. . . . Printed in Asia.”
J. Walker, Fundamentals of Physics, p. vi (8th ed. 2008 Wiley
Int’l Student ed.).
Both the foreign and the American copies
say:
“No part of this publication may be
reproduced, stored in a retrieval system, or transmitted in any
form or by any means . . . except as permitted under
Sections 107 or 108 of the 1976 United States Copyright Act.”
Compare,
e.g., ibid. (Int’l ed.), with Walker,
supra, at vi (American ed.).
The upshot is that there are two essentially
equivalent versions of a Wiley textbook, 654 F. 3d, at 213,
each version manufactured and sold with Wiley’s permission:
(1) an American version printed and sold in the United States, and
(2) a foreign version manufactured and sold abroad. And Wiley makes
certain that copies of the second version state that they are not
to be taken (without permission) into the United States.
Ibid.
Petitioner, Supap Kirtsaeng, a citizen of
Thailand, moved to the United States in 1997 to study mathemat- ics
at Cornell University.
Ibid. He paid for his educa- tion
with the help of a Thai Government scholarship which required him
to teach in Thailand for 10 years on his return. Brief for
Petitioner 7. Kirtsaeng successfully completed his undergraduate
courses at Cornell, successfully completed a Ph. D. program in
mathematics at the University of Southern California, and then, as
promised, returned to Thailand to teach.
Ibid. While he was
studying in the United States, Kirtsaeng asked his friends and
family in Thailand to buy copies of foreign edition
English-language textbooks at Thai book shops, where they sold at
low prices, and mail them to him in the United States.
Id.,
at 7–8. Kirtsaeng would then sell them, reimburse his family
and friends, and keep the profit. App. to Pet. for Cert.
48a–49a.
B
In 2008 Wiley brought this federal lawsuit
against Kirtsaeng for copyright infringement. 654 F. 3d, at
213. Wiley claimed that Kirtsaeng’s unauthorized importation
of its books and his later resale of those books amounted to an
infringement of Wiley’s §106(3) exclusive right to dis-
tribute as well as §602’s related import prohibition. 17
U. S. C. §§106(3) (2006 ed.), 602(a) (2006 ed.,
Supp. V). See also §501 (2006 ed.) (authorizing infringement
action). App. 204–211. Kirtsaeng replied that the books he
had acquired were “ ‘lawfully
made’ ” and that he had acquired them
legitimately. Record in No. 1:08–CV–7834–DCP
(SDNY), Doc. 14, p. 3. Thus, in his view, §109(a)’s
“first sale” doctrine permitted him to resell or
otherwise dispose of the books without the copyright owner’s
further permission.
Id., at 2–3.
The District Court held that Kirtsaeng could not
assert the “first sale” defense because, in its view,
that doctrine does not apply to “foreign-manufactured
goods” (even if made abroad with the copyright owner’s
permission). App. to Pet. for Cert. 72a. The jury then found that
Kirtsaeng had willfully infringed Wiley’s American copyrights
by selling and importing without authorization copies of eight of
Wiley’s copyrighted titles. And it assessed statutory damages
of $600,000 ($75,000 per work). 654 F. 3d, at 215.
On appeal, a split panel of the Second Circuit
agreed with the District Court.
Id., at 222. It pointed out
that §109(a)’s “first sale” doctrine applies
only to “the owner of a particular copy . . .
lawfully made under this title.”
Id., at
218–219 (emphasis added). And, in the majority’s view,
this language means that the “first sale” doctrine does
not apply to copies of American copyrighted works manufactured
abroad.
Id., at 221. A dissenting judge thought that the
words “lawfully made under this title” do not refer
“to a place of manufacture” but rather “focu[s]
on whether a particular copy was manufactured lawfully under”
Amer- ica’s copyright statute, and that “the lawfulness
of the manufacture of a particular copy should be judged by
U. S. copyright law.”
Id., at 226 (opinion of
Murtha, J.).
We granted Kirtsaeng’s petition for
certiorari to con- sider this question in light of different views
among the Circuits. Compare
id., at 221 (case below)
(“first sale” doctrine does not apply to copies
manufactured outside the United States), with
Omega S. A. v.
Costco Wholesale Corp., 541 F.3d 982, 986 (CA9 2008)
(“first sale” doctrine applies to copies manufactured
outside the United States only if an authorized first sale occurs
within the United States), aff’d by an equally divided court,
562 U. S. ___ (2010), and
Sebastian Int’l, Inc.
v.
Consumer Contacts (PTY) Ltd., 847 F.2d 1093, 1098,
n. 1 (CA3 1988) (limitation of the first sale doctrine to
copies made within the United States “does not fit
comfortably within the scheme of the Copyright Act”).
II
We must decide whether the words
“lawfully made under this title” restrict the scope of
§109(a)’s “first sale” doctrine
geographically. The Second Circuit, the Ninth Circuit, Wiley, and
the Solicitor General (as
amicus) all read those words as
imposing a form of
geographical limitation. The Second
Circuit held that they limit the “first sale” doctrine
to particular copies “made in territories
in which the
Copyright Act is law,” which (the Circuit says) are
copies “manufactured domestically,” not “outside
of the United States.” 654 F. 3d, at 221–222
(emphasis added). Wiley agrees that those five words limit the
“first sale” doctrine “to copies made in
conformance with the [United States] Copyright Act
where the
Copyright Act is appli-
cable,” which (Wiley says)
means it does not apply to copies made “outside the United
States” and at least not to “foreign production of a
copy for distribution exclusively abroad.” Brief for
Respondent 15–16. Similarly, the Solicitor General says that
those five words limit the “first sale”
doctrine’s applicability to copies
“ ‘
made subject to and in compliance with
[the Copyright Act],’ ” which (the Solicitor
General says) are copies “made in the United States.”
Brief for United States as
Amicus Curiae 5 (hereinafter
Brief for United States) (emphasis added). And the Ninth Circuit
has held that those words limit the “first sale”
doctrine’s applicability (1) to copies lawfully made in the
United States, and (2) to copies lawfully made outside the United
States but initially sold in the United States with the copyright
owner’s permission.
Denbicare U. S. A. Inc.
v.
Toys “R” Us, Inc.,
84
F.3d 1143, 1149–1150 (1996).
Under any of these geographical interpretations,
§109(a)’s “first sale” doctrine would not
apply to the Wiley Asia books at issue here. And, despite an
American copyright owner’s permission to
make copies
abroad, one who
buys a copy of any such book or other
copyrighted work—whether at a retail store, over the
Internet, or at a library sale—could not resell (or otherwise
dispose of) that particular copy without further permission.
Kirtsaeng, however, reads the words
“lawfully made under this title” as imposing a
non-geographical limitation. He says that they mean made
“in accordance with” or “in compliance
with” the Copyright Act. Brief for Petitioner 26. In that
case, §109(a)’s “first sale” doctrine would
apply to copyrighted works as long as their manufacture met the
requirements of American copyright law. In particular, the doctrine
would apply where, as here, copies are manufactured abroad with the
permission of the copyright owner. See §106 (referring to the
owner’s right to authorize).
In our view, §109(a)’s language, its
context, and the common-law history of the “first sale”
doctrine, taken together, favor a
non-geographical
interpretation. We also doubt that Congress would have intended to
create the practical copyright-related harms with which a
geographical interpretation would threaten ordinary scholarly,
artistic, commercial, and consumer activities. See Part II–D,
infra. We consequently conclude that Kirtsaeng’s
nongeographical reading is the better reading of the Act.
A
The language of §109(a) read literally
favors Kirtsaeng’s nongeographical interpretation, namely,
that “lawfully made under this title” means made
“in accordance with” or “in compliance
with” the Copyright Act. The language of §109(a) says
nothing about geography. The word “under” can mean
“[i]n accordance with.” 18 Oxford English Dictionary
950 (2d ed. 1989). See also Black’s Law Dictionary 1525 (6th
ed. 1990) (“according to”). And a nongeographical
interpretation provides each word of the five-word phrase with a
distinct purpose. The first two words of the phrase,
“lawfully made,” suggest an effort to distinguish those
copies that were made lawfully from those that were not, and the
last three words, “under this title,” set forth the
standard of “lawful[ness].” Thus, the nongeograph- ical
reading is simple, it promotes a traditional copyright objective
(combatting piracy), and it makes word-by-word linguistic
sense.
The geographical interpretation, however,
bristles with linguistic difficulties. It gives the word
“lawfully” little, if any, linguistic work to do. (How
could a book be
unlawfully “made under this
title”?) It imports geography into a statutory provision that
says nothing explicitly about it. And it is far more complex than
may at first appear.
To read the clause geographically, Wiley, like
the Sec- ond Circuit and the Solicitor General, must first
emphasize the word “under.” Indeed, Wiley reads
“under this title” to mean “in conformance with
the Copyright Act
where the Copyright Act is
applicable.” Brief for Respondent 15. Wiley must then
take a second step, arguing that the Act
“is
applicable” only in the United States.
Ibid. And the
Solicitor General must do the same. See Brief for United States 6
(“A copy is ‘
lawfully made under this
title’ if Title 17 governs the copy’s creation
and the copy is made in compliance with Title 17’s
requirements”). See also
post, at 7 (Ginsburg, J.,
dissenting) (“under” describes something
“governed or regulated by another”).
One difficulty is that neither
“under” nor any other word in the phrase means
“where.” See,
e.g., 18 Oxford English
Dictionary,
supra, at 947–952 (definition of
“under”). It might mean “subject to,” see
post, at 6, but as this Court has repeatedly acknowledged,
the word evades a uniform, consistent meaning. See
Kucana v.
Holder,
558 U.S.
233, 245 (2010) (“ ‘under’ is
chameleon”);
Ardestani v.
INS,
502 U.S.
129, 135 (1991) (“under” has “many dictionary
definitions” and “must draw its meaning from its
context”).
A far more serious difficulty arises out of the
uncer- tainty and complexity surrounding the second step’s
effort to read the necessary geographical limitation into the word
“applicable” (or the equivalent). Where, precisely, is
the Copyright Act “applicable”? The Act does not
instantly
protect an American copyright holder from
unauthorized piracy taking place abroad. But that fact does not
mean the Act is
inapplicable to copies made abroad. As a
matter of ordinary English, one can say that a statute imposing,
say, a tariff upon “any rhododendron grown in Nepal”
applies to
all Nepalese rhododendrons. And, similarly, one
can say that the American Copyright Act is
applicable to
all pirated copies, including those printed overseas.
Indeed, the Act itself makes clear that (in the Solicitor
General’s language) foreign-printed pirated copies are
“sub- ject to” the Act. §602(a)(2) (2006 ed.,
Supp. V) (refer- ring to importation of copies “the making of
which either constituted an infringement of copyright, or which
would have constituted an infringement of copyright if this title
had been applicable”); Brief for United States 5. See also
post, at 6 (suggesting that “made under” may be
read as “subject to”).
The appropriateness of this linguistic usage is
underscored by the fact that §104 of the Act itself says that
works “
subject to protection under this title”
include unpublished works “without regard to the nationality
or domicile of the author,” and works “first
published” in any one of the nearly 180 nations that have
signed a copyright treaty with the United States.
§§104(a), (b) (2006 ed.) (emphasis added); §101
(2006 ed., Supp. V) (defining “treaty party”);
U. S. Copyright Office, Circular No. 38A, International
Copyright Relations of the United States (2010). Thus, ordinary
English permits us to say that the Act “applies” to an
Irish manuscript lying in its author’s Dublin desk drawer as
well as to an original recording of a ballet performance first made
in Japan and now on display in a Kyoto art gallery. Cf. 4 M. Nimmer
& D. Nimmer, Copyright §17.02, pp. 17–18,
17–19 (2012) (herein- after Nimmer on Copyright) (noting that
the principle that “copyright laws do not have any
extraterritorial operation” “requires some
qualification”).
The Ninth Circuit’s geographical
interpretation pro- duces still greater linguistic difficulty. As
we said, that Cir- cuit interprets the “first sale”
doctrine to cover both (1) copies manufactured in the United States
and (2) copies manufactured abroad but first sold in the United
States with the American copyright owner’s permission.
Den-
bicare U. S. A., 84 F. 3d, at
1149–1150. See also Brief for Respondent 16 (suggesting that
the clause
at least excludes “the foreign production
of a copy for distribution exclusively abroad”);
id.,
at 51 (the Court need “not de- cide whether the copyright
owner would be able to restrict further distribution” in the
case of “a downstream domestic purchaser of
authorized
imports”); Brief for Petitioner in
Costco Wholesale
Corp. v.
Omega, S. A., O. T. 2010, No.
08–1423, p. 12 (excepting imported copies “made by
unrelated foreign copyright holders” (emphasis deleted)).
We can understand why the Ninth Circuit may have
thought it necessary to add the second part of its definition. As
we shall later describe, see Part II–D,
infra, without
some such qualification a copyright holder could prevent a buyer
from domestically reselling or even giving away copies of a video
game made in Japan, a film made in Germany, or a dress (with a
design copyright) made in China,
even if the copyright
holder has granted permission for the foreign manufacture,
importation, and an initial domestic sale of the copy. A publisher
such as Wiley would be free to print its books abroad, allow their
im- portation and sale within the United States, but prohibit
students from later selling their used texts at a campus bookstore.
We see no way, however, to reconcile this
half-geographical/half-nongeographical interpretation with the
language of the phrase, “lawfully made under this
title.” As a matter of English, it would seem that those five
words either do cover copies lawfully made abroad or they do
not.
In sum, we believe that geographical
interpretations create more linguistic problems than they resolve.
And considerations of simplicity and coherence tip the purely
linguistic balance in Kirtsaeng’s, nongeographical,
favor.
B
Both historical and contemporary statutory
context in- dicate that Congress, when writing the present version
of §109(a), did not have geography in mind. In respect to
history, we compare §109(a)’s present language with the
language of its immediate predecessor. That predecessor said:
“[N]othing in this Act shall be
deemed to forbid, prevent, or restrict the transfer of any copy of
a copyrighted work
the possession of which has been lawfully
obtained.” Copyright Act of 1909, §41, 35Stat. 1084
(emphasis added).
See also Copyright Act of 1947, §27,
61Stat. 660. The predecessor says nothing about geography (and
Wiley does not argue that it does). So we ask whether Congress, in
changing its language implicitly
introduced a geograph- ical
limitation that previously was lacking. See also Part II–C,
infra (discussing 1909 codification of common-law
principle).
A comparison of language indicates that it did
not. The predecessor says that the “first sale”
doctrine protects “the transfer of any copy
the possession
of which has been lawfully obtained.” The present version
says that “
the owner of a particular copy or
phonorecord lawfully made under this title is entitled to sell or
otherwise dispose of the possession of that copy or
phonorecord.” What does this change in language
accomplish?
The language of the former version referred to
those
who are not owners of a copy, but mere possessors who
“lawfully obtained” a copy. The present version covers
only those who are
owners of a “lawfully made”
copy. Whom does the change leave out? Who might have law- fully
obtained a copy of a copyrighted work but not
owned
that copy? One answer is owners of movie theaters, who during the
1970’s (and before) often
leased films from movie
distributors or filmmakers. See S. Donahue, American Film
Distribution 134, 177 (1987) (describing producer-distributer and
distributer-exhibitor agreements); Note, The Relationship Between
Motion Picture Distribution and Exhibition: An Analysis of the
Effects of Anti-Blind Bidding Legislation, 9 Comm/Ent. L. J.
131, 135 (1986). Because the theater owners had “lawfully
obtained” their copies, the earlier version could be read as
allowing them to sell that copy,
i.e., it might have given
them “first sale” protection. Because the theater
owners were lessees, not owners, of their copies, the change in
language makes clear that they (like bailees and other lessees)
cannot take advantage of the “first sale” doctrine.
(Those who find legislative history useful will find confirmation
in,
e.g., House Committee on the Judiciary, Copyright Law
Revision, Supplementary Report of the Register of Copyrights on the
General Revision of the U. S. Copyright Law: 1965 Revision
Bill, 89th Cong., 1st Sess., pt. 6, p. 30 (Comm. Print 1965)
(hereinafter Copyright Law Revision) (“[W]here a person has
rented a print of a motion picture from the copyright owner, he
would have no right to lend, rent, sell, or otherwise dispose of
the print without first obtaining the copyright owner’s
permission”). See also
Platt & Munk Co. v.
Republic Graphics, Inc., 315 F.2d 847, 851 (CA2 1963)
(Friendly, J.) (pointing out predecessor statute’s leasing
problem)).
This objective perfectly well explains the new
language of the present version, including the five words here at
issue. Section 109(a) now makes clear that a lessee of a copy will
not receive “first sale” protection but one who
owns a copy
will receive “first sale”
protection,
provided, of course, that the copy was
“lawfully made” and not pi- rated. The new
language also takes into account that a copy may be “lawfully
made under this title” when the copy, say of a phonorecord,
comes into its owner’s possession through use of a compulsory
license, which “this title” provides for elsewhere,
namely, in §115. Again, for those who find legislative history
useful, the relevant legislative report makes this clear.
H. R. Rep. No. 94–1476, p. 79 (1976) (“For
example, any resale of an illegally ‘pirated’
phonorecord would be an infringement, but the disposition of a
phonorecord legally made under the compulsory licensing provisions
of section 115 would not”).
Other provisions of the present statute also
support a nongeographical interpretation. For one thing, the stat-
ute phases out the “manufacturing clause,” a clause
that appeared in earlier statutes and had limited importation of
many copies (of copyrighted works) printed outside the United
States. §601, 90Stat. 2588 (“Prior to July 1, 1982
. . . the importation into or public distribution in the
United States of copies of a work consisting preponderantly of
nondramatic literary material . . . is prohibited unless
the portions consisting of such material have been manufac- tured
in the United States or Canada”). The phasing out of this
clause sought to equalize treatment of copies manufactured in
America and copies manufactured abroad. See H. R. Rep. No.
94–1476, at 165–166.
The “equal treatment” principle,
however, is difficult to square with a geographical interpretation
of the “first sale” clause that would grant the holder
of an American copyright (perhaps a foreign national, see
supra, at 10) permanent control over the American
distribution chain (sales, resales, gifts, and other distribution)
in respect to copies printed abroad but not in respect to copies
printed in America. And it is particularly difficult to believe
that Congress would have sought this unequal treatment while saying
nothing about it and while, in a related clause (the manufacturing
phase-out), seeking the opposite kind of policy goal. Cf.
Golan v.
Holder, 565 U. S. ___, ___ (2012) (slip
op., at 30) (Congress has moved from a copyright regime that, prior
to 1891, entirely excluded foreign works from U. S. copyright
protection to a regime that now “ensure[s] that most works,
whether foreign or domestic, would be
governed by the same legal
regime” (emphasis added)).
Finally, we normally presume that the words
“lawfully made under this title” carry the same meaning
when they appear in different but related sections.
Department
of Revenue of Ore. v.
ACF Industries, Inc.,
510 U.S.
332, 342 (1994). But doing so here produces surprising
consequences. Consider:
(1) Section 109(c) says that, despite the
copyright owner’s exclusive right “to display” a
copyrighted work (provided in §106(5)), the owner of a
particular copy “law- fully made under this title” may
publicly display it without further authorization. To interpret
these words geographically would mean that one who buys a
copyrighted work of art, a poster, or even a bumper sticker, in
Canada, in Europe, in Asia, could not display it in America without
the copyright owner’s further authorization.
(2) Section 109(e) specifically provides that
the owner of a particular copy of a copyrighted video arcade game
“lawfully made under this title” may “publicly
perform or display that game in coin-operated equipment”
without the authorization of the copyright owner. To interpret
these words geographically means that an arcade owner could not
(“without the authority of the copyright owner”)
perform or display arcade games (whether new or used) originally
made in Japan. Cf.
Red Baron-Franklin Park, Inc. v.
Taito
Corp., 883 F.2d 275 (CA4 1989).
(3) Section 110(1) says that a teacher, without
the copyright owner’s authorization, is allowed to perform or
display a copyrighted work (say, an audiovisual work) “in the
course of face-to-face teaching activities”—unless the
teacher knowingly used “a copy that was not law- fully made
under this title.” To interpret these words geographically
would mean that the teacher could not (without further
authorization) use a copy of a film during class if the copy was
lawfully made in Canada, Mexico, Europe, Africa, or Asia.
(4) In its introductory sentence, §106
provides the Act’s basic exclusive rights to an “owner
of a copyright under this title.” The last three words cannot
support a geographic interpretation.
Wiley basically accepts the first three
readings, but ar- gues that Congress intended the restrictive
consequences. And it argues that context simply requires that the
words of the fourth example receive a different interpretation.
Leaving the fourth example to the side, we shall explain in Part
II–D,
infra, why we find it unlikely that Congress
would have intended these, and other related
consequences
.
C
A relevant canon of statutory interpretation
favors a nongeographical reading. “[W]hen a statute covers an
is- sue previously governed by the common law,” we must pre-
sume that “Congress intended to retain the substance of the
common law.”
Samantar v.
Yousuf, 560 U. S.
___, ___, n. 13 (2010) (slip op., at 14, n. 13). See also
Isbrandtsen Co. v.
Johnson,
343
U.S. 779, 783 (1952) (“Statutes which invade the common
law . . . are to be read with a presumption favoring the
retention of long-established and familiar principles, except when
a statu- tory purpose to the contrary is evident”).
The “first sale” doctrine is a
common-law doctrine with an impeccable historic pedigree. In the
early 17th century Lord Coke explained the common law’s
refusal to permit restraints on the alienation of chattels.
Referring to Littleton, who wrote in the 15th century, Gray, Two
Contributions to Coke Studies, 72 U. Chi. L. Rev. 1127, 1135
(2005), Lord Coke wrote:
“[If] a man be possessed of
. . . a horse, or of any other chattell . . .
and give or sell his whole interest . . . therein upon
condition that the Donee or Vendee shall not alien[ate] the same,
the [condition] is voi[d], because his whole interest
. . . is out of him, so as he hath no possibilit[y] of a
Reverter, and it is against Trade and Traffi[c], and bargaining and
contracting betwee[n] man and man: and it is within the reason of
our Author that it should ouster him of all power given to
him.” 1 E. Coke, Institutes of the Laws of England §360,
p. 223 (1628).
A law that permits a copyright holder to control
the resale or other disposition of a chattel once sold is simi-
larly “against Trade and Traffi[c], and bargaining and con-
tracting.”
Ibid.
With these last few words, Coke emphasizes the
importance of leaving buyers of goods free to compete with each
other when reselling or otherwise disposing of those goods.
American law too has generally thought that competition, including
freedom to resell, can work to the advantage of the consumer. See,
e.g.,
Leegin Creative Leather Products, Inc. v.
PSKS, Inc.,
551 U.S.
877, 886 (2007) (restraints with “manifestly
anticompetitive effects” are
per se illegal;
others are subject to the rule of reason (internal quotation marks
omitted)); 1 P. Areeda & H. Hovenkamp, Antitrust Law ¶100,
p. 4 (3d ed. 2006) (“[T]he principal objective of
antitrust policy is to maximize consumer welfare by encouraging
firms to behave competitively”).
The “first sale” doctrine also frees
courts from the administrative burden of trying to enforce
restrictions upon difficult-to-trace, readily movable goods. And it
avoids the selective enforcement inherent in any such effort. Thus,
it is not surprising that for at least a century the “first
sale” doctrine has played an important role in American
copyright law. See
Bobbs-Merrill Co. v.
Straus,
210 U.S.
339 (1908); Copyright Act of 1909, §41, 35Stat. 1084. See
also Copyright Law Revision, Further Discussions and Comments on
Preliminary Draft for Revised U. S. Copyright Law, 88th Cong.,
2d Sess., pt. 4, p. 212 (Comm. Print 1964) (Irwin Karp of
Authors’ League of America expressing concern for “the
very basic concept of copyright law that, once you’ve sold a
copy legally, you can’t restrict its resale”).
The common-law doctrine makes no geographical
distinctions; nor can we find any in
Bobbs-Merrill (where
this Court first applied the “first sale” doctrine) or
in §109(a)’s predecessor provision, which Congress
enacted a year later. See
supra, at 12. Rather, as the
Solicitor General acknowledges, “a straightforward
application of
Bobbs-Merrill” would not preclude the
“first sale” defense from applying to authorized copies
made overseas. Brief for United States 27. And we can find no
language, context, purpose, or history that would rebut a
“straightforward application” of that doctrine
here.
The dissent argues that another principle of
statutory interpretation works against our reading, and points out
that elsewhere in the statute Congress used different words to
express something like the non-geographical reading we adopt.
Post, at 8–9 (quoting §602(a)(2) (prohibiting the
importation of copies “the making of which either constituted
an infringement of copyright, or which would have constituted an
infringement of copyright if this title had been applicable”
(emphasis deleted))). Hence, Congress, the dissent believes, must
have meant §109(a)’s different language to mean
something different (such as the dissent’s own geographical
interpretation of §109(a)). We are not aware, however, of any
canon of interpretation that forbids interpreting different words
used in different parts of the same statute to mean roughly the
same thing. Regardless, were there such a canon, the
dissent’s interpretation of §109(a) would also violate
it. That is because Congress elsewhere in the 1976 Act included the
words “manufactured in the United States or Canada,”
90Stat. 2588, which express just about the same geographical
thought that the dissent reads into §109(a)’s very
different language.
D
Associations of libraries, used-book dealers,
technology companies, consumer-goods retailers, and museums point
to various ways in which a geographical interpretation would fail
to further basic constitutional copyright objectives, in particular
“promot[ing] the Progress of Science and useful Arts.”
U. S. Const., Art. I, §8, cl. 8.
The American Library Association tells us that
library collections contain at least 200 million books published
abroad (presumably, many were first published in one of the nearly
180 copyright-treaty nations and enjoy American copyright
protection under 17 U. S. C. §104, see
supra,
at 10); that many others were first published in the United States
but printed abroad because of lower costs; and that a geographical
interpretation will likely require the li- braries to obtain
permission (or at least create significant uncertainty) before
circulating or otherwise distributing these books. Brief for
American Library Association et al. as
Amici Curiae 4,
15–20. Cf.
id., at 16–20, 28 (discussing
limitations of potential defenses, including the fair use and
archival exceptions, §§107–108). See also Library
and Book Trade Almanac 511 (D. Bogart ed., 55th ed. 2010) (during
2000–2009 “a significant amount of book printing moved
to foreign nations”).
How, the American Library Association asks, are
the libraries to obtain permission to distribute these millions of
books? How can they find, say, the copyright owner of a foreign
book, perhaps written decades ago? They may not know the copyright
holder’s present address. Brief for American Library
Association 15 (many books lack indication of place of manufacture;
“no practical way to learn where [a] book was
printed”). And, even where addresses can be found, the costs
of finding them, contacting owners, and negotiating may be high
indeed. Are the libraries to stop circulating or distributing or
displaying the millions of books in their collections that were
printed abroad?
Used-book dealers tell us that, from the time
when Benjamin Franklin and Thomas Jefferson built commercial and
personal libraries of foreign books, American readers have bought
used books published and printed abroad. Brief for Powell’s
Books Inc. et al. as
Amici Curiae 7 (citing M. Stern,
Antiquarian Bookselling in the United States (1985)). The dealers
say that they have “operat[ed] . . . for
centuries” under the assumption that the “first
sale” doctrine applies. Brief for Powell’s Books 7. But
under a geographical interpretation a contemporary tourist who
buys, say, at Shakespeare and Co. (in Paris), a dozen copies of a
foreign book for American friends might find that she had violated
the copyright law. The used-book dealers cannot easily predict what
the foreign copyright holder may think about a reader’s
effort to sell a used copy of a novel. And they believe that a
geographical interpretation will injure a large portion of the
used-book business.
Technology companies tell us that
“automobiles, microwaves, calculators, mobile phones,
tablets, and personal computers” contain copyrightable
software programs or packaging. Brief for Public Knowledge
et al. as
Amici Curiae 10. See also Brief for
Association of Service and Computer Dealers International, Inc.,
et al. as
Amici Curiae 2. Many of these items are made
abroad with the American copyright holder’s permission and
then sold and imported (with that permission) to the United States.
Brief for Retail Litigation Center, Inc., et al. as
Amici
Curiae 4. A geographical interpretation would prevent the
resale of, say, a car, without the permission of the holder of each
copyright on each piece of copyrighted automobile software. Yet
there is no reason to believe that foreign auto manufacturers
regularly obtain this kind of permission from their software
component suppliers, and Wiley did not indicate to the contrary
when asked. See Tr. of Oral Arg. 29–30. Without that
permission a foreign car owner could not sell his or her used
car.
Retailers tell us that over $2.3 trillion worth
of for- eign goods were imported in 2011. Brief for Retail
Litigation Center 8. American retailers buy many of these goods
after a first sale abroad.
Id., at 12. And, many of these
items bear, carry, or contain copyrighted “packaging, logos,
labels, and product inserts and instructions for [the use of]
everyday packaged goods from floor cleaners and health and beauty
products to breakfast cereals.”
Id., at 10–11.
The retailers add that American sales of more traditional
copyrighted works, “such as books, recorded music, motion
pictures, and magazines” likely amount to over $220 billion.
Id., at 9. See also
id., at 10 (electronic game
industry is $16 billion). A geographical interpretation would
subject many, if not all, of them to the disruptive impact of the
threat of infringement suits.
Id., at 12.
Art museum directors ask us to consider their
efforts to display foreign-produced works by, say, Cy Twombly,
René Magritte, Henri Matisse, Pablo Picasso, and others. See
supra, at 10 (describing how §104 often makes such
works “subject to” American copyright protection). A
geographical interpretation, they say, would require the museums to
obtain permission from the copyright owners before they could
display the work, see
supra, at 15—even if the
copyright owner has already sold or donated the work to a foreign
museum. Brief for Association of Art Museum Directors et al.
as
Amici Curiae 10–11. What are the museums to do,
they ask, if the artist retained the copyright, if the artist
cannot be found, or if a group of heirs is arguing about who owns
which copyright?
Id., at 14.
These examples, and others previously mentioned,
help explain
why Lord Coke considered the “first
sale” doctrine necessary to protect “Trade and
Traffi[c], and bargaining and contracting,” and they help
explain
why American copyright law has long applied that
doctrine. Cf.
supra, at 17–18
.
Neither Wiley nor any of its many
amici
deny that a geographical interpretation could bring about these
“horribles”—at least in principle. Rather, Wiley
essentially says that the list is artificially invented. Brief for
Respondent 51–52. It points out that a federal court first
adopted a geographical interpretation more than 30 years ago.
CBS, Inc. v.
Scorpio Music Distributors, Inc.,
569 F. Supp. 47, 49 (ED Pa. 1983), summarily aff’d, 738
F.2d 424 (CA3 1984) (table). Yet, it adds, these problems have not
occurred. Why not? Because, says Wiley, the problems and threats
are purely theoretical; they are unlikely to reflect reality. See
also
post, at 30–31.
We are less sanguine. For one thing, the law has
not been settled for long in Wiley’s favor. The Second
Circuit, in its decision below, is the first Court of Appeals to
adopt a purely geographical interpretation. The Third Circuit has
favored a nongeographical interpretation.
Sebastian
Int’l, 847 F.2d 1093. The Ninth Circuit has favored a
modified geographical interpretation with a nongeographical (but
textually unsustainable) corollary designed to diminish the
problem.
Denbicare U. S. A.,
84 F.3d 1143. See
supra, at 11–12. And other
courts have hesitated to adopt, and have cast doubt upon, the
validity of the geographical interpretation.
Pearson Educ.,
Inc. v.
Liu, 656 F. Supp. 2d 407 (SDNY 2009);
Red-Baron Franklin Park, Inc. v.
Taito Corp., No.
88–0156–A, 1988 WL 167344, *3 (ED Va. 1988),
rev’d on other grounds, 883 F.2d 275 (CA4 1989).
For another thing, reliance upon the
“first sale” doctrine is deeply embedded in the
practices of those, such as book- sellers, libraries, museums, and
retailers, who have long relied upon its protection. Museums, for
example, are not in the habit of asking their foreign counterparts
to check with the heirs of copyright owners before sending,
e.g., a Picasso on tour. Brief for Association of Art Mu-
seum Directors 11–12. That inertia means a dramatic change is
likely necessary before these institutions, instructed by their
counsel, would begin to engage in the complex permission-verifying
process that a geographical interpretation would demand. And this
Court’s adoption of the geographical interpretation could
provide that dramatic change. These intolerable consequences (along
with the absurd result that the copyright owner can ex- ercise
downstream control even when it authorized the import or first
sale) have understandably led the Ninth Circuit, the Solicitor
General as
amicus, and the dissent to adopt textual readings
of the statute that attempt to mitigate these harms. Brief for
United States 27–28;
post, at 24–28. But those
readings are not defensible, for they require too many
unprecedented jumps over linguistic and other hurdles that in our
view are insurmountable. See,
e.g.,
post, at 26
(acknowledging that its reading of §106(3)
“significantly curtails the independent effect of
§109(a)”).
Finally, the fact that harm has proved limited
so far may simply reflect the reluctance of copyright holders so
far to assert geographically based resale rights. They may decide
differently if the law is clarified in their favor. Regardless, a
copyright law that can work in practice only if unenforced is not a
sound copyright law. It is a law that would create uncertainty,
would bring about selective enforcement, and, if widely unenforced,
would breed disrespect for copyright law itself.
Thus, we believe that the practical problems
that petitioner and his
amici have described are too
serious, too extensive, and too likely to come about for us to
dismiss them as insignificant—particularly in light of the
ever-growing importance of foreign trade to America. See The World
Bank, Imports of goods and services (% of GDP) (imports in 2011 18%
of U. S. gross domestic product compared to 11% in 1980),
online at http:// data.worldbank.org/indicator/NE.IMP.GNFS.ZS? (as
visited Mar. 15, 2013, and available in Clerk of Court’s case
file). The upshot is that copyright-related consequences along with
language, context, and interpretive canons argue strongly against a
geographical interpretation of §109(a).
III
Wiley and the dissent make several additional
impor- tant arguments in favor of the geographical interpretation.
First, they say that our
Quality King decision
strongly supports its geographical interpretation. In that case we
asked whether the Act’s “importation provision,”
now §602(a)(1) (then §602(a)), barred importation
(without permission) of a copyrighted item (labels affixed to hair
care products) where an American copyright owner authorized the
first sale and export of hair care products with copyrighted labels
made in the United States, and where a buyer sought to import them
back into the United States without the copyright owner’s
permission. 523 U. S., at 138–139.
We held that the importation provision did
not prohibit sending the products back into the United
States (without the copyright owner’s permission). That
section says:
“Importation into the United States,
without the authority of the owner of copyright under this title,
of copies or phonorecords of a work that have been acquired outside
the United States
is an infringement of the exclusive right
to distribute copies or phono-records
under section
106.” 17 U. S. C. §602(a)(1) (2006 ed.,
Supp. V) (emphasis added). See also §602(a) (1994 ed.).
We pointed out that this section makes
importation an infringement of the “exclusive right to
distribute . . .
under 106.” We noted that
§109(a)’s “first sale” doctrine limits the
scope of the §106 exclusive distribution right. We took as
given the fact that the products at issue had at least once been
sold. And we held that consequently, importation of the copyrighted
labels does not violate §602(a)(1). 523 U. S., at
145.
In reaching this conclusion we endorsed
Bobbs-Merrill and its statement that the copyright laws were
not “intended to create a right which would permit the holder
of the copyright to fasten, by notice in a book . . . a
restriction upon the subsequent alienation of the subject-matter of
copyright after the owner had parted with the title to one who had
acquired full dominion over it.” 210 U. S., at
349–350.
We also explained why we rejected the claim that
our interpretation would make §602(a)(1) pointless. Those
advancing that claim had pointed out that the 1976 Copyright Act
amendments retained a prior anti-piracy provision, prohibiting the
importation of
pirated copies.
Qual-
ity King,
supra, at 146. Thus, they said, §602(a)(1) must
prohibit the importation of lawfully made copies, for to allow the
importation of those lawfully made copies
after a first
sale, as
Quality King’s holding would do, would
leave §602(a)(1) without much to prohibit. It would become
superfluous, without any real work to do.
We do not believe that this argument is a strong
one. Under
Quality King’s interpretation,
§602(a)(1) would still forbid importing (without permission,
and subject to the exceptions in §602(a)(3)) copies lawfully
made abroad, for example, where (1) a foreign publisher operating
as the licensee of an American publisher prints copies of a book
overseas but, prior to any authorized sale, seeks to send them to
the United States; (2) a foreign printer or other manufacturer (if
not the “owner” for purposes of §109(a),
e.g., before an authorized sale) sought to send copyrighted
goods to the United States; (3) “a book publisher transports
copies to a wholesaler” and the wholesaler (not yet the
owner) sends them to the United States, see Copyright Law Revision,
pt. 4, at 211 (giving this example); or (4) a foreign film
distributor, having leased films for distri- bution, or any other
licensee, consignee, or bailee sought to send them to the United
States. See,
e.g., 2 Nimmer on Copyright
§8.12[B][1][a], at 8–159 (“Section 109(a) provides
that the distribution right may be exercised solely with respect to
the initial disposition of copies of a work, not to prevent or
restrict the resale or other further transfer of possession of such
copies”). These examples show that §602(a)(1) retains
significance. We concede it has less significance than the dissent
believes appropriate, but the dissent also adopts a construction of
§106(3) that “significantly curtails”
§109(a)’s effect,
post, at 26, and so limits the
scope of that provision to a similar, or even greater, degree.
In
Quality King we rejected the
“superfluous” argument for similar reasons. But, when
rejecting it, we said that, where an author gives exclusive
American distribution rights to an American publisher and exclusive
British distribution rights to a British publisher,
“presumably
only those [copies] made by the publisher of
the United States edition would be ‘lawfully made under this
title’ within the meaning of §109(a).” 523
U. S., at 148 (emphasis added). Wiley now argues that this
phrase in the
Quality King opinion means that books
published abroad (under license) must fall outside the words
“lawfully made under this title” and that we have
consequently already given those words the geographical
interpretation that it favors.
We cannot, however, give the
Quality King
statement the legal weight for which Wiley argues. The language
“lawfully made under this title” was not at issue in
Qual-
ity King; the point before us now was not then
fully argued; we did not canvas the considerations we have here set
forth; we there said nothing to suggest that the example assumes a
“first sale”; and we there hedged our state- ment with
the word “presumably.” Most importantly, the statement
is pure dictum. It is dictum contained in a rebuttal to a
counterargument. And it is
unnecessary dictum even in that
respect. Is the Court having once written dicta calling a tomato a
vegetable bound to deny that it is a fruit forever after?
To the contrary, we have written that we are not
necessarily bound by dicta should more complete argument
demonstrate that the dicta is not correct.
Central Va. Community
College v.
Katz,
546 U.S.
356, 363 (2006) (“[W]e are not bound to follow our dicta
in a prior case in which the point now at issue was not fully
debated”);
Humphrey’s Executor v.
United
States,
295 U.S.
602, 627–628 (1935) (rejecting, under
stare
decisis, dicta, “which may be followed if sufficiently
persuasive but which are not controlling”). And, given the
bit part that our
Quality King statement played in our
Quality King decision, we believe the view of
stare
decisis set forth in these opinions applies to the matter now
before us.
Second, Wiley and the dissent argue (to
those who consider legislative history) that the Act’s
legislative history supports their interpretation. But the
historical events to which it points took place more than a decade
before the enactment of the Act and, at best, are inconclusive.
During the 1960’s, representatives of
book, record, and film industries, meeting with the Register of
Copyrights to discuss copyright revision, complained about the
difficulty of dividing international markets. Copyright Law
Revision Discussion and Comments on Report of the Register of
Copyrights on the General Revision of the U. S. Copyright Law,
88th Cong., 1st Sess., pt. 2, p. 212 (Comm. Print 1963) (English
editions of “particular” books “fin[d]”
their “way into this country”);
id., at 213
(works “publi[shed] in a country where there is no copyright
protection of any sort” are put into “the free stream
of commerce” and “shipped to the United States”);
ibid. (similar concern in respect to films).
The then-Register of Copyrights, Abraham
Kaminstein, found these examples “very troubl[ing].”
Ibid. And the Copyright Office released a draft provision
that it said “deals with the matter of the importation for
distribution in the United States of foreign copies that were made
under proper authority but that, if sold in the United States,
would be sold in contravention of the rights of the copyright owner
who holds the exclusive right to sell copies in the United
States.”
Id., pt. 4, at 203. That draft version,
without reference to §106, simply forbids unauthorized
imports. It said:
“Importation into the United States
of copies or records of a work for the purpose of distribution to
the public shall, if such articles are imported without the
authority of the owner of the exclusive right to distrib- ute
copies or records under this title, constitute an infringement of
copyright actionable under section 35 [ 17 U. S. C.
§501].”
Id., Preliminary Draft for Revised
U. S. Copyright Law and Discussions and Comments, 88th Cong.,
2d Sess., pt. 3, pp. 32–33 (Comm. Print 1964).
In discussing the draft, some of those present
expressed concern about its effect on the “first sale”
doctrine. For example, Irwin Karp, representing the Authors League
of America asked, “If a German jobber lawfully buys cop- ies
from a German publisher, are we not running into the problem of
restricting his transfer of his lawfully obtained copies?”
Id., pt. 4, at 211. The Copyright Office representative
replied, “This could vary from one situation to another, I
guess. I should guess, for example, that if a book publisher
transports [
i.e., does not sell] copies to a wholesaler
[
i.e., a
nonowner], this is not
yet the kind
of transaction that exhausts the right to control
disposition.”
Ibid. (emphasis added).
The Office later withdrew the draft, replacing
it with a draft, which, by explicitly referring to §106, was
similar to the provision that became law, now §602(a)(1). The
Office noted in a report that, under the new draft, importation of
a copy (without permission) “would violate the exclusive
rights of the U. S. copyright owner . . . where the
copyright owner had authorized the making of copies in a foreign
country for distribution only in that country.”
Id.,
pt. 6, at 150.
Still, that part of the report says nothing
about the “first sale” doctrine, about §109(a), or
about the five words, “lawfully made under this title.”
And neither the report nor its accompanying 1960’s draft
answers the question before us here. Cf.
Quality King, 523
U. S., at 145 (without those five words, the import clause,
via its reference to §106, imports the “first
sale” doctrine).
But to ascertain the best reading of
§109(a), rather than dissecting the remarks of industry
representatives concerning §602 at congressional meetings held
10 years before the statute was enacted, see
post, at
13–16, we would give greater weight to the congressional
report accompanying §109(a), written a decade later when
Congress passed the new law. That report says:
“Section 109(a) restates and
confirms the principle that, where the
copyright owner has
transferred ownership of a particular copy or phonorecord of a
work, the person to whom the copy or phonorecord is transferred is
entitled to dispose of it by sale, rental, or any other means.
Under this principle, which has been established by the court
decisions and . . . the present law, the copyright
owner’s exclusive right of public distribution would have no
effect upon anyone who owns ‘a particular copy or phonorecord
lawfully made under this title’ and who wishes to transfer it
to someone else or to destroy it.
. . . . .
“To come within the scope of section
109(a), a copy or phonorecord must have been ‘lawfully made
under this title,’ though not necessarily with the copyright
owner’s authorization. For example, any resale of an
illegally ‘pirated’ phonorecord would be an
infringement but the disposition of a phonorecord legally made
under the compulsory licensing provisions of section 115 would
not.” H. R. Rep. No. 94–1476, at 79 (emphasis
added).
Accord, S. Rep. No. 94–473, pp.
71–72 (1975).
This history reiterates the importance of the
“first sale” doctrine. See,
e.g., Copyright Law
Revision, 1964 Revision Bill with Discussions and Comments, 89th
Cong., 1st Sess., pt. 5, p. 66 (Comm. Print 1965) (“[F]ull
ownership of a lawfully-made copy authorizes its owner to dispose
of it freely”). It explains, as we have explained, the
nongeographical purposes of the words “lawfully made under
this title.” Part II–B,
supra. And it says
nothing about geography. Nor, importantly, did §109(a)’s
predecessor provision. See
supra, at 12. This means that,
contrary to the dissent’s suggestion, any lack of legislative
history pertaining to the “first sale” doctrine only
tends to bolster our position that Congress’ 1976 revision
did not intend to create a drastic geographical change in its
revision to that provision. See
post, at 18, n. 13. We
consequently believe that the legislative history, on balance,
supports the non- geographical interpretation.
Third, Wiley and the dissent claim that a
nongeographical interpretation will make it difficult, perhaps
impos- sible, for publishers (and other copyright holders) to
divide foreign and domestic markets. We concede that is so. A
publisher may find it more difficult to charge different prices for
the same book in different geographic markets. But we do not see
how these facts help Wiley, for we can find no basic principle of
copyright law that suggests that publishers are especially entitled
to such rights.
The Constitution describes the nature of
American copyright law by providing Congress with the power to
“secur[e]” to “[a]uthors” “for
limited [t]imes” the “
exclusive [r]ight to their
. . .
[w]ritings.” Art. I, §8, cl. 8.
The Founders, too, discussed the need to grant an author a limited
right to exclude competition. Compare Letter from Thomas Jefferson
to James Madison (July 31, 1788), in 13 Papers of Thomas Jefferson
440, 442–443 (J. Boyd ed. 1956) (arguing against any
monopoly) with Letter from James Madison to Thomas Jefferson (Oct.
17, 1788), in 14
id., at 16, 21 (J. Boyd ed. 1958) (arguing
for a limited monopoly to secure production). But the
Constitution’s language nowhere suggests that its limited
exclusive right should include a right to divide markets or a
concomitant right to charge different purchasers different prices
for the same book, say to increase or to maximize gain. Neither, to
our knowledge, did any Founder make any such suggestion. We have
found no precedent suggesting a legal preference for
interpretations of copyright statutes that would provide for market
divisions. Cf. Copyright Law Revision, pt. 2, at 194 (statement of
Barbara Ringer, Copyright Office) (division of territorial markets
was “primarily a matter of private contract”).
To the contrary, Congress enacted a copyright
law that (through the “first sale” doctrine) limits
copyright holders’ ability to divide domestic markets. And
that limitation is consistent with antitrust laws that ordinarily
forbid market divisions. Cf.
Palmer v.
BRG of Ga.,
Inc., 498 U.S.
46, 49–50 (1990) (
per curiam) (“[A]greements
between competitors to allocate territories to minimize competition
are illegal”). Whether copyright owners should, or should
not, have more than ordinary commercial power to divide
international markets is a matter for Congress to decide. We do no
more here than try to determine what decision Congress has
taken.
Fourth, the dissent and Wiley contend
that our decision launches United States copyright law into an
unprecedented regime of “international exhaustion.”
Post, at 18–23; Brief for Respondent 45–46. But
they point to nothing indicative of congressional intent in 1976.
The dissent also claims that it is clear that the United States now
opposes adopting such a regime, but the Solicitor General as
amicus has taken no such position in this case. In fact,
when pressed at oral argument, the Solicitor General stated that
the consequences of Wiley’s reading of the statute (perpetual
downstream control) were “worse” than those of
Kirtsaeng’s reading (restriction of market segmentation). Tr.
of Oral Arg. 51. And the dissent’s reliance on the Solicitor
General’s position in
Quality King is under- mined by
his agreement in that case with our reading of §109(a). Brief
for United States as
Amicus Curiae in
Quality King,
O. T. 1996, No. 1470, p. 30 (“When . . .
Congress wishes to make the location of manufacture relevant to
Copyright Act protection, it does so expressly”);
ibid. (calling it “distinctly unlikely” that
Congress would have provided an incentive for overseas
manufacturing).
Moreover, the exhaustion regime the dissent
apparently favors would provide that “the sale in one country
of a good” does not “exhaus[t] the
intellectual-property owner’s right to control the
distribution of that good elsewhere.”
Post, at
18–19. But our holding in
Quality King that
§109(a) is a defense in U. S. courts even when “the
first sale occurred abroad,” 523 U. S., at 145,
n. 14, has already significantly eroded such a principle.
IV
For these reasons we conclude that the
considerations supporting Kirtsaeng’s nongeographical
interpretation of the words “lawfully made under this
title” are the more persuasive. The judgment of the Court of
Appeals is reversed, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.