Innovation Asset Blog

Supreme Court dismisses 'geographically limited' first-sale interpretations

This week the U.S. Supreme Court upheld a geographically unlimited interpretation of the first-sale doctrine in a controversial case regarding college textbooks. This ruling has broad implications that extend well beyond the publishing industry, however, and could be a significant source of concern for copyright holders attempting to strategically monetize their works across international borders.

The case in question centered on a former Cornell University student who asked friends and family in Thailand to purchase cheap textbooks and ship them to him in the U.S. where he could sell them at a profit. While the publishing company asserted that such strategies should be prohibited, the court opinion declared that the customer's right to resell works protected by American copyrights should persist regardless of where the product was originally manufactured.

In a 6-3 majority opinion, the court took a broader view of the matter, suggesting that narrower first-sale interpretations would have commercially impractical consequences in a number of industries.

"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," Justice Stephen Breyer wrote. "Yet there is no reason to believe that foreign auto manufacturers regularly obtain this kind of permission from their software component suppliers, and [the publishing company] did not indicate to the contrary when asked."

While some are framing this decision as a significant victory for consumer choice, others worry that both copyright and patent holders will struggle to maintain international market segmentation. According to PatentlyO, the ruling effectively weakens the value of a given intellectual asset by dismissing the owner's legal justification for charging different prices across markets in alignment with cost of living variances and other factors.

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.