Matt Lonsdale is a graduate of the Schulich School of Law at Dalhousie University.

The US Court of Appeals, Second Circuit has affirmed that the “first sale” doctrine of US copyright law, codified as section 109(a) of the Copyright Act, does not apply to works manufactured outside of the United States.

In John Wiley & Sons, Inc. v. Kirtsaeng, textbook publisher Wiley claimed that Kirstaeng had imported foreign editions of their textbooks and distributed them within the US. This infringed their exclusive right to do the same, as guaranteed to them by section 602(a)(1) of the Copyright Act. Kirstaeng submitted that the first sale doctrine provided a defence to the claim. The first sale doctrine reads, in part, “the owner of a particular copy, lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy”.

An earlier Supreme Court case (Quality King Distributors, Inc. v. L’Anza Research International, Inc.), involved hair care products (and their copyrighted labels) manufactured within the US, exported to foreign countries and then re-imported by a third party for sale within the US. The court unanimously found that the first sale doctrine does limit the scope of a copyright holder’s exclusive right of distribution in the case of copies manufactured within the US.  They chose not to resolve the issue of whether this was true for copies manufactured outside of the US.

In Kirstaeng, the trial court held that as the textbooks were manufactured outside of the United States, they were not “lawfully made under this title” and thus the first sale doctrine was not available as a defence. Kirstaeng appealed the decision. The Court of Appeals followed the decision of the trial court, holding that “lawfully made under this title” referred to copies produced under the US Copyright Act, rather than under the laws of another country. Section 602(a)(1) contained no such limiting language, and so Wiley’s exclusive right of distribution remained intact regardless of where the textbooks were manufactured.

At present, Canadian law does not grant the copyright holder exclusive distribution rights. However, the changes that Bill C-32 proposed to make to section 3(1) of Canada’s Copyright Act would have created a form of the right. While Bill C-32 died with the dissolution of the 40th Parliament, the current Conservative majority government is expected to introduce a substantially similar bill shortly. There is also no codified first sale doctrine in Canadian law, although the Supreme Court has recognized the value of the idea.