29.

Question:

KKis from Bangkok, Thailand. She studies medicine in the Pontifical University of Santo Tomas
(UST). She learned that the same foreign books prescribed in UST are 40-50% cheaper in
Bangkok. So she ordered 50 copies of each book for herself and her classmates and sold the
books at 20% less than the price in the Philippines. XX, the exclusive licensed publisher of the
books in the Philippines, sued KK for copyright infringement. Decide.

Answer: KK is liable for infringement of copyright. XX, as exclusive licensed publisher, is

entitled, within the scope of the license, to all the rights and remedies that the licensor has with
respect to the copyright (Sec. 180, IPC). The importation by KK of 50 copies of each foreign
book prescribed in UST and selling them locally at 20 less than their respective prices in the
Philippines is subject to the doctrine of fair use set out in Sec. 185.1 of the IPC. The factors to be
considered in determining whether the use made of a work is fair use shall include:
a. The purpose and character of the use, including whether such use is of a commercial nature
or is for non-profit educational purposes;
b. The nature of the copyrighted work;
c. The amount and substantiality of the portion used in relation to the copyrighted work as a
whole;
d. The effect of the use upon the potential market for or value of the copyrighted work.

Applying the above-listed factors to the problem, KK’s importation of the books and their sale
local clearly show the unfairness of her use of the books, particularly the adverse effect of her
price discounting on the business of XX.

CASE:

Kirtsaeng vs John Wiley & Sons, Inc.

Docket Number: 11-697
Court: U.S. Supreme Court
Judge: Stephen G. Breyer

Doctrine: “First sale” doctrine applies to copies of a copyrighted work lawfully made abroad.
Kirtsaeng's sale of lawfully-made copies purchased overseas was protected by the first-sale
doctrine.

FACTS:

The Respondent Wiley, is an American company that publishes and sells textbooks. It sells such
books to foreign countries through its subsidiary. Wiley’s textbooks that are sold abroad have
markings indicating that the books are only to be sold in a particular country or region. The
Petitioner, Kirtsaeng, is from Thailand and came to the U.S. in 1997 to pursue an undergraduate
degree in mathematics at Cornell University. He claims that he later attended a university in

Remorozo, Kristina Cazandra DL.

California and earned a Ph.D. in 2009. During his time in the U.S., Kirtsaeng received shipments
of textbooks that his family purchased in Thailand. Kirtsaeng sold these textbooks on
commercial websites such as eBay.com and used the profits to reimburse his family and to pay
for his education. According to testimony from Kirtsaeng during the jury trial, he earned
$900,000 in revenues from the textbook sales.
Wiley alleges that Kirtsaeng’s importation and distribution of the textbooks is a copyright
infringement under 17 U.S.C. § 501. Kirtsaeng claims that before selling the textbooks, he had
consulted his friends in Thailand and a “Google Answers” website to ascertain that he could
legally resell the foreign textbooks in the U.S. He asserts he did not violate the Copyright Act
because § 109(a), the first-sale doctrine, allows resale of textbooks without permission from the
copyright owner. Wiley alleges that § 109(a) does not apply to goods manufactured in foreign
countries.

ISSUE: Whether the first-sale doctrine codified in 17 U.S.C. § 109(a) applies to copyrighted
works manufactured and purchased abroad and then resold in the United States without the
copyright owner’s permission.
RULING:

The Supreme Court ruled that the “first sale” doctrine applies to copies of a copyrighted work
lawfully made abroad. Kirtsaeng's sale of lawfully-made copies purchased overseas was
protected by the first-sale doctrine. The Court held that the first sale doctrine applies to goods
manufactured outside of the United States, and the protections and exceptions offered by the
Copyright Act to works "lawfully made under this title" is not limited by geography. Rather, it
applies to all copies legally made anywhere, not just in the United States, in accordance with
U.S. copyright law. So, wherever a copy of a book is first made and sold, it can be resold in the
U.S. without permission from the publisher.

Wiley reads “lawfully made under this title” to impose a geographical limitation that
prevents§109(a)’s doctrine from applying to Wiley Asia’s books. Kirtsaeng, however, reads the
phrase as imposing the non-geographical limitation made “in accordance with” or “in
compliance with” the Copyright Act, which would permit the doctrine to apply to copies
manufactured abroad with the copyright owner’s permission.

Section 109(a) says nothing about geography. A geographical interpretation of the first-sale
doctrine could require libraries to obtain permission before circulating the many books in their
collections that were printed overseas; potential practical problems are too serious, extensive,
and likely to come about to be dismissed as insignificant—particularly in light of the ever-
growing importance of foreign trade to America.

Remorozo, Kristina Cazandra DL.