No. 11-697
`
`IN THE
`
`Supreme Court of the United States
`
`SUPAP KIRTSAENG d/b/a Bluechristine99,
`
`d
`
`—v.—
`
`JOHN WILEY & SONS, INC.,
`
`Petitioner,
`
`Respondent.
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES
`COURT OF APPEALS FOR THE SECOND CIRCUIT
`
`BRIEF OF ASSOCIATION OF AMERICAN PUBLISHERS
`AS AMICUS CURIAE IN SUPPORT OF RESPONDENT
`
`CHARLES S. SIMS
`Counsel of Record
`PATRICK J. DEMPSEY
`PROSKAUER ROSE LLP
`Eleven Times Square
`New York, New York 10036
`(212) 969-3000
`csims@proskauer.com
`
`Counsel for Amicus Curiae
`
`September 7, 2012
`
`

`
` i
`
`
`TABLE OF CONTENTS
`
`PAGE
`TABLE OF AUTHORITIES ...................................................... ii
`INTEREST OF AMICUS CURIAE ........................................1
`SUMMARY OF ARGUMENT...............................................2
`ARGUMENT:
`THE 1976 ACT'S EXCLUSIVE RIGHT TO IMPORT
`REACHES NON-PIRATICAL COPIES, AND ITS
`LANGUAGE, STRUCTURE, AND LEGISLATIVE HISTORY
`PRECLUDE CONSTRUING THE FIRST SALE DOCTRINE
`TO EVISCERATE THAT EXPANDED RIGHT ..................3
`A. Sections 602(a) and 106(3) Provide
`Copyright Owners Rights Against
`Distinct Acts Of Infringement ....................5
`B. Section 602(a) Expands, Strengthens,
`and Protects Core Aspects Of The
`Exclusive Distribution Right ....................10
`C. Plain Language and Structure .................15
`D. Legislative History....................................23
`E. Kirtsaeng’s Proposed Construction
`Would Cause Copyright Owners and the
`Public Substantial Harm that Congress
`Enacted Section 601(a)(1) to Avert...........35
`CONCLUSION...............................................................40
`
`
`
`
`
`

`
`
`
`ii
`
`TABLE OF AUTHORITIES
`TABLE OF AUTHORITIES
`
`
`
`
`CASES
`CASES
`COMMUNITY FOR CREATIVE NON-
`COMMUNITY FOR CREATIVE NON-
`VIOLENCE V. REID,
`VIOLENCE V. REID,
`490 U.S. 730 (1989)....................................................23
`490 U.S. 730 (1989) .................................................. ..23
`CUNARD STEAMSHIP CO. V. MELLON,
`CUNARD STEAMSHIP CO. V. MELLON,
`262 U.S. 100 (1923)......................................................9
`262 U.S. 100 (1923) .................................................... ..9
`FEIST PUBL’NS, INC. V. RURAL TEL.
`FEISTPUBL ’NS, INC. V. RURAL TEL.
`SERVS. CO, INC.,
`SERVS. CO, INC.,
`499 U.S. 340 (1991)....................................................23
`499 U.S. 340 (1991) .................................................. ..23
`HARPER & ROW PUBLISHERS, INC. V.
`HARPER & ROW PUBLISHERS, INC. V.
`NATION ENTERS.,
`NATION ENTERS,
`471 U.S. 539 (1985).......................................... 6, 11, 23
`471 U.S. 539 (1985) ........................................ .. 6, 11,23
`MILLS MUSIC, INC. V. SYNDER,
`MILLS MUSIC, INC. V. SYNDER,
`469 U.S. 153 (1985)....................................................23
`469 U.S. 153 (1985) .................................................. ..23
`OMEGA S.A. V. COSTCO WHOLESALE
`CORPORATION, 541 F.3D 984 (9TH CIR.
`CORPORATION, 541 F.3D 984 (9TH CIR.
`2008) .........................................................................18
`2008) ....................................................................... .. 18
`QUALITY KING DISTRIB., INC. V. L’ANZA
`QUALITY KING DISTRIB., INC. V. L’ANzA
`RESEARCH INT’L, INC.,
`RESEARCH INT’L, INC.,
`523 U.S. 135 (1998)..................................... 8, 16, 18,19
`523 U.S. 135 (1998) ................................... .. 8, 16, 18,19
`SABRI V. UNITED STATES, 541 U.S. 600,
`SABRI V. UNITED STATES, 541 U.S. 600,
`608 (2004)...................................................................39
`608 (2004) ................................................................. .. 39
`SONY CORP. V. UNIVERSAL CITY STUDIOS,
`SONY CORP. V. UNIVERSAL CITY STUDIOS,
`INC.,464 U.S. 417 (1984) ............................................23
`INC.,464 U.S. 417 (1984) .......................................... ..23
`
`OMEGA S.A. V. COSTCO WHOLESALE
`
`
`
`
`
`
`
`PAGE(S)
`PAGE(S)
`
`

`
`
`
`iii
`iii
`
`TWENTIETH CENTURY MUSIC CORP. V.
`TWENTIETH CENTURYMUSIC CORP. V.
`AIKEN, 422 U.S. 151 (1975)........................................14
`AIKEN, 422 U.S. 151 (1975) ...................................... .. 14
`
`WASH. STATE GRANGE V. WASH. STATE
`WASH. STATE GRANGE V. WASH. STATE
`REPUBLICAN PARTY, 552 U.S. 442, 449-
`REPUBLICAN PARTY, 552 U.S. 442, 449-
`450 (2008)...................................................................39
`450 (2008) ................................................................. .. 39
`
`
`STATUTES
`STATUTES
`17 U.S.C. § 106............................................5, 16, 24, 29
`17 U.S.C.§ 106 .......................................... ..5, 16, 24, 29
`17 U.S.C. § 106(3) .............................................. passim
`17 U.S.C.§ 106(3) ............................................ ..passim
`17 U.S.C. § 109 ..................................................... passim
`17 U.S.C. § 109 ................................................... ..passim
`17 U.S.C. § 501...........................................................16
`17 U.S.C.§501 ......................................................... ..16
`17 U.S.C. § 602...........................................................18
`17 U.S.C.§602 ......................................................... ..18
`17 U.S.C. § 602(a)(1) .................................................... passim
`17 U.S.C. § 602(a)(1) .................................................. ..passim
`17 U.S.C. § 602(a)(3) ..................................................... 17, 18
`17 U.S.C. § 602(a)(3) ................................................... .. 17, 18
`17 U.S.C. § 602(b)......................................................... 21, 23
`17 U.S.C. § 602(b) ....................................................... .. 21, 23
`CH. 320, § 30, 35 STAT. 1075, 1082 (1909)..................24
`CH. 320, § 30, 35 STAT. 1075, 1082 (1909) ................ ..24
`PUB.L. 94-553, TIT. I, § 101, OCT. 19,
`PUB.L. 94-553, TIT. I, § 101, OCT. 19,
`1976, 90 STAT. 2589 ...................................................34
`1976, 90 STAT. 2589 ................................................. .. 34
`
`
`OTHER AUTHORITIES
`OTHER AUTHORITIES
`BLACK'S LAW DICTIONARY
`(6TH ED. 1990) .............................................................8
`(6TH ED. 1990) ........................................................... ..8
`
`BLACK'S LAW DICTIONARY
`
`
`
`

`
`
`
`iv
`iv
`
`2 MELVILLE B. NIMMER & DAVID NIMMER
`
`H.R. REP. NO. 1476, 94TH CONG., 2D
`H.R. REP. NO. 1476, 94TH CONG., 2D
`SESS. 170 (1976) ..........................................................9
`SESS. 170 (1976) ........................................................ ..9
`H.R. REP. NO. 89-2237, 167 (1966) ............................34
`H.R. REP. No. 89-2237, 167 (1966) .......................... ..34
`H.R. REP. NO. 94-1476, 169 (1976) ............... 22, 34, 35
`H.R. REP. No. 94-1476, 169 (1976) ............. .. 22, 34, 35
`2 MELVILLE B. NIMMER & DAVID NIMMER
`NIMMER ON COPYRIGHT (2012) § 8.12[A] ......................6
`NIMMER ON COPYRIGHT (20 12) § 8. 12 [A] .................... .. 6
`S. REP. NO. 473, 94TH CONG., 1ST SESS.
`S. REP. N0. 473, 94TH CONG., 1ST SESS.
`152 (1975).....................................................................9
`152 (1975) ................................................................... ..9
`S. REP. NO. 94-473 (1975) ..........................................22
`S. REP. No. 94-473 (1975) ........................................ ..22
`
`
`
`
`

`
`
`
`INTEREST OF AMICUS CURIAE1
`The Association of American Publishers, Inc.
`(“AAP”) is the major national association of publish-
`ers of general books, textbooks, and educational
`materials. Its approximately 300 members include
`most of the major commercial book publishers in the
`United States and many smaller or non-profit
`publishers, including university presses and scholar-
`ly associations. AAP members publish hardcover and
`paperback titles in every field, thousands of which
`are also published abroad (some by AAP publishers
`and their affiliates, some by unrelated publishers).
`AAP members and their counsel played a major
`role in the lengthy revision process culminating in
`the 1976 Copyright Act, and in subsequent revisions,
`and can advise the Court with first-hand knowledge
`of the considerations that—then as now—amply
`justified Congress in protecting copyright by render-
`ing infringing the unauthorized importation of copies
`made abroad under foreign law for the non-U.S.
`market, whether those copies are piratical or
`authorized.
`
`
`1 The parties have consented to the filing of this brief by letters
`filed with the Clerk. No counsel for a party authored this brief
`in whole or in part, and no counsel for a party (nor a party
`itself) made a monetary contribution intended to fund the
`preparation or submission of this brief. No person other than
`amicus or its counsel made a monetary contribution to its
`preparation or submission.
`
`
`
`

`
` 2
`
`
`
`SUMMARY OF ARGUMENT
`The unauthorized importation of books acquired
`outside the United States and made under foreign
`law for foreign markets infringes the exclusive rights
`of the United States copyright owner.
`The exclusive right to import copies acquired
`abroad is of great importance to copyright owners.
`Central to the ability of copyright to “promote the
`progress of science and useful arts” is the exercise of
`Congress’s power to secure for limited times, to
`authors, the exclusive right to reproducing and
`distributing their works. Importation of works made
`abroad for the foreign market, without the authority
`of the U.S. copyright owner, renders those rights
`radically insecure, and diminishes both the value of
`the copyright and its power to stimulate further
`creation and distribution.
`By prohibiting the importation of copies made
`abroad for foreign markets, 17 U.S.C. § 602(a)(1)
`protects core aspects of the exclusive distribution
`right. It ensures that U.S. copyright owners have, as
`Congress intended, the right to determine when and
`where to distribute their works, at what price, and
`with what content, including the right to do so even
`if they first exploited their works in markets abroad.
`Petitioner’s argument that the first sale doctrine
`in 17 U.S.C. § 109 applies to non-piratical copies
`made and acquired abroad so long as there has been
`a first sale (even if abroad) effectively neuters
`§ 602(a)(1) and strips copyright owners of the
`
`
`
`

`
` 3
`
`
`
`statutory exclusive right to import. Neither the
`statutory text nor the structure of these and related
`statutory provisions support that argument. The
`history of the drafting and enactment of § 602(a)(1)
`shows that the provision was intended to bar the
`unauthorized importation of copies made under for-
`eign law for foreign use, whether piratical or author-
`ized. Construing §§ 109 and 602(a)(1) to permit the
`unrestricted importation of any copies of any works
`previously sold once abroad is insupportable under
`the history and text of § 602(a)(1) and renders
`§ 602(b) senseless. Petitioner’s construction would
`cause a seismic shift in copyright law, supplanting
`the U.S. market with copies made and previously
`sold abroad, and severely impairing the incentives to
`create and disseminate copyrightable work, the qual-
`ity of published works, and the vitality of domestic
`publishers.
`
`ARGUMENT
`THE 1976 ACT'S EXCLUSIVE RIGHT TO IMPORT
`NON-PIRATICAL
`COPIES,
`REACHES
`AND
`ITS
`LANGUAGE, STRUCTURE, AND LEGISLATIVE HISTORY
`PRECLUDE CONSTRUING THE FIRST SALE DOCTRINE
`TO EVISCERATE THAT EXPANDED RIGHT
`The briefs of petitioner and his amici proceed as if
`this case concerns trade policy and consumer choice
`issues, rather than the proper construction of the
`copyright statutes that further copyright’s vital ends.
`According to them, the Second Circuit’s opinion
`below will send manufacturers racing overseas for
`
`
`
`

`
` 4
`
`
`
`the “Holy Grail” of essentially unlimited control over
`downstream sales of all copyrighted goods for their
`entire product life. That projection substitutes an
`imagined harm of which there is no evidence for the
`genuine harm with which Congress was concerned,
`and ignores the effect curtailing the importation
`prohibition will have on the stimulation and
`production of original works.
`Congress enacted the pertinent statutes pursuant
`to its power to “promote the Progress of Science and
`useful Arts” by “securing for limited Times to
`Authors” the exclusive right to their writings. The
`expansion of the exclusive right to import crafted by
`Congress in the 1976 Act further secured those
`exclusive rights, as both the Second and Ninth
`Circuits correctly recognized. The arguments of
`petitioner and his amici would render those rights
`fundamentally insecure, and destroy the exclusive
`rights to import and distribute that the Framers
`contemplated and Congress has provided for.
`The arguments of petitioner and his supporting
`amici would permit the unrestricted importation of
`any copies of any works previously sold once abroad
`(whether to consumers or otherwise), and devastate
`the Act’s protections for authors, publishers, and
`others involved in the creative industries whose
`works have their principal value in copyright. For
`authors and publishers (as well as those involved in
`motion pictures, sound recordings, and so forth), the
`rights secured by §§ 106(3) and 602(a)(1) are not
`merely incidental to the Copyright Act's structure of
`
`
`
`

`
` 5
`
`
`
`incentives to create original works.2 Rather, the
`right to control initial distribution of original works
`within the United States is integral to the Copyright
`Act's protections designed to foster creativity for the
`public good. A result that effectively eliminates the
`right of initial U.S. distribution, and allows massive
`numbers of copies acquired abroad and made under
`foreign law for foreign markets to leak back into the
`United States without restraint, would be contrary to
`the clear language and history of § 602(a)(1), and
`cause U.S. copyright owners substantial harm.3
`A. Sections 106(3) and 602(a) Provide Copy-
`right Owners Rights Against Distinct
`Acts Of Infringement
`1. Section 106 grants to copyright owners several
`exclusive rights with respect to copyrighted works,
`“subject to” specified limitations set forth in “sections
`107 through 120.” 17 U.S.C. § 106. Among these
`exclusive rights is the right “to distribute copies or
`phonorecords of the copyrighted work to the public
`
`
`2 What is now 17 U.S.C. § 602(a)(1) was originally adopted in
`1976 as § 602(a) of Title 17. We refer to the provision according
`to its current codification.
`3 For convenience, the copies subject to § 602(a)(1) outside the
`reach of § 109’s first sale doctrine—copies made abroad under
`foreign copyright law for foreign markets—are referred to some-
`times here as “works made abroad for use abroad,” or “works
`made abroad under foreign law,” without meaning to suggest
`that Congress’s
`focus was narrowly on
`the place of
`manufacture.
`
`
`
`

`
` 6
`
`
`
`by sale or other transfer of ownership, or by rental,
`lease, or lending.” 17 U.S.C. § 106(3).
`The distribution right is an integral component of
`the incentives created by the Copyright Act. By
`recognizing a distinct exclusive distribution right,
`the Copyright Act ensures that, in addition to
`preventing unauthorized reproductions of copy-
`righted works, an owner may prohibit unauthorized
`exploitation
`of
`such works
`through public
`distribution. “[G]ranting the distribution right is a
`necessary supplement to the reproduction right in
`order fully to protect the copyright owner.” 2 Melville
`B. Nimmer & David Nimmer. NIMMER ON
`COPYRIGHT (2012) § 8.12[A], at 8-157.
`Section 106(3) does more than supplement the
`right to control reproduction. Limits on distribution
`are independently valuable. “It would be anomalous
`indeed if the copyright owner could prohibit public
`distribution of his work when this occurred through
`unauthorized reproduction, but were powerless to
`prevent the same result if the owner's own copies (or
`copies authorized by him) were stolen or otherwise
`wrongfully obtained and thereafter publicly distri-
`buted.” Id. at 8-156 to 8-157. The § 106(3) right
`encompasses not only the choice whether to publish
`at all, but also the choices of when, where, and in
`what form first to publish a work. Harper & Row
`Publishers, Inc. v. Nation Enters., 471 U.S. 539, 564
`(1985). Subject to statutorily enumerated limitations,
`the distribution right gives a copyright owner the
`exclusive right to control distribution of legitimate as
`
`
`
`

`
` 7
`
`
`
`well as pirated copies, and prevents others from
`distributing legitimate copies of copyrighted works
`without the owner’s consent.
`2. Evidently deeming the exclusive distribution
`right insufficient to meet the needs of copyright
`owners, Congress has for more than a hundred years
`supplemented that right with a freestanding right to
`prevent unauthorized importation. Until the 1976
`Act, protection against importation was limited to
`piratical copies (that is, copies created without the
`authorization of any relevant copyright owner). To
`protect the ability of copyright owners to serve both
`the U.S. market and markets abroad, Chapter 6 of
`the 1976 Act went further, enacting inter-related
`provisions extending past piratical copies to author-
`ized copies made abroad generally. As the text of
`§ 602(a) makes plain and as confirmed by the
`legislative history discussed below in Point B, the
`broad exclusive right to import protects owners from
`having their U.S. markets supplanted by copies
`aimed at and previously sold in foreign markets, and
`then collected and resold en masse in the U.S. as
`petitioner did. By expanding the exclusive right to
`import to reach non-piratical copies, Congress
`protected the ability of copyright owners to serve the
`U.S. market without being constrained by prior sales
`in foreign markets.
`As the text and legislative history make plain,
`Congress conferred a broad right of action against
`imports of copies acquired outside the United States
`made under foreign law, whether those copies are
`
`
`
`

`
` 8
`
`
`
`piratical or authorized (“lawfully made”). Section
`602(a)(1) makes infringing any importation “without
`the authority of the owner of copyright under this
`title” of “copies . . . that have been acquired outside
`the United States.” In addition, Congress authorized
`the U.S. Customs and Border Protection to exclude
`piratical copies, and to notify copyright owners of the
`attempted importation of lawfully made copies so as
`to arm copyright owners whose exclusive importation
`right is being infringed with information enabling
`them to bring infringement suits seeking injunctive
`relief. 17 U.S.C. § 602(b).
`As recognized in Quality King Distrib., Inc. v.
`L’anza Research Int’l, 523 U.S. 135, 145 (1998),
`§ 602(a)(1) prohibits acts that are distinct from acts
`of unauthorized distribution. The § 106(3) exclusive
`distribution right allows a copyright owner to
`prevent the unauthorized distribution of copies “to
`the public by sale or other transfer of ownership, or
`by rental, lease, or lending.” Id. at 143. By contrast,
`on its face, § 602(a)(1) provides a right of action
`against unauthorized importation—whether or not
`those copies have previously been distributed or sold
`or are in the course of being sold, and whether or not
`possession of or control over those copies has ever
`changed.
`Importation, by definition, entails the carrying or
`transfer of copies across borders. See BLACK'S LAW
`DICTIONARY (6th ed. 1990) at 755 (“Importation –
`The act of bringing goods and merchandise into a
`country from a foreign country”) (citing Cunard S.S.
`
`
`
`

`
` 9
`
`
`
`Co. v. Mellon, 262 U.S. 100 (1923)). It would cover,
`for example, the shipping to the U.S. of copies
`acquired abroad by an industrious reseller, or by an
`individual like Kirtsaeng, even if there had not yet
`been any dissemination of those copies to the
`American public (which would be required for
`infringing distribution under § 106(3)). There may
`have been, but need not be, a prior sale, transfer of
`possession, or other distribution. See H.R. Rep. No.
`1476, 94th Cong., 2d Sess. 170 (1976) (§ 602(a) allows
`actions against unauthorized importers of goods
`acquired abroad “even before any public distribution
`in this country has taken place”); S. Rep. No. 473,
`94th Cong., 1st Sess. 152 (1975) (same).
`The basic rules of construction that require
`meaning
`to be accorded
`to every statutory
`provision—in addition to the legislative history
`addressed below—make plain that
`in enacting
`§ 602(a)(1), Congress was seeking to reach conduct
`not reached under § 106(3) alone. Otherwise, there
`would have been no need for authors or publishers to
`reach agreement to seek, or for Congress to grant,
`the broad protection against importation covered by
`§ 602; § 106(3) would have sufficed. Section 602(a)
`further secures copyright owners’ exclusive rights,
`and enhances the value of their U.S. copyrights, by
`adding another weapon (beyond the distribution
`right) to the copyright owner's arsenal—the right to
`prevent unauthorized importation of copies before
`they even cross the border for distribution to third-
`party U.S. vendors or purchasers.
`
`
`
`

`
`
`
`10
`
`If, for example, Salman Rushdie publishes a novel
`initially in England and India that sells one million
`copies, which a second Kirtsaeng snaps up and
`exports to Costco and Wal-Mart in the U.S. in an
`attempt to fulfill all the demand in the U.S., that
`importation would be wrongful under § 601(a)(1), “an
`infringement of the exclusive right to distribute
`copies . . . under Section 106, actionable under
`Section 501.”
`B. Section 602(a) Expands, Strengthens, and
`Protects Core Aspects Of The Exclusive
`Distribution Right.
`The construction of § 109 adopted by the Second
`Circuit and virtually all prior courts,4 and contended
`for by book publishers and others, results not from
`any quest for the “Holy Grail” (in Kirtsaeng’s words,
`“the power to lock up, extract exorbitant rents from,
`or discriminate in any secondary market”), as
`Kirtsaeng
`charges. This
`case
`is not about
`extravagant hypotheticals of complete control, but
`about whether publisher’s traditional abilities to
`protect against exploitative importation will be
`preserved, or effectively eliminated. Preventing
`unauthorized importation and distribution of copies
`made abroad is fundamental to preserving the
`exclusive rights that copyright affords to authors and
`publishers, which necessarily enable them to control
`the timing, content, packaging, pricing, and (in some
`instances) quality of their releases to the American
`
`4 See Respondent’s Brief at 35-38 (citing cases).
`
`
`
`

`
`
`
`11
`
`public—i.e., the crucial choices of when, where, and
`in what form first to publish a work integral to the
`§ 106(3) right. Harper & Row, 471 U.S. at 564.
`1. Timing
`Publishers (and others who fund and arrange for
`the distribution of copyright-based products) often
`follow a pattern of sequential release across
`geographic markets and formats. “Staggered” release
`dates enable copyright owners to coordinate and
`maximize pre-release publicity
`for anticipated
`distributions within particular regions. Distribution
`of a book or sound recording may be launched
`initially in a pertinent market abroad, and then
`subsequently in the U.S. so that national release
`may coincide with a U.S. publicity “tour” by the
`author or recording artist.
`Staggered release may also serve to create a
`popular “buzz” or crescendo of demand before the
`recording is released in the large U.S. market. A
`book may be initially distributed in the United
`Kingdom, with U.S. distribution occurring if and
`after international demand reaches a particular
`level. Or highly anticipated U.S. works may be first
`released outside the U.S., such as the initial release
`of “Marvel’s The Avengers” in Europe and elsewhere,
`to diminish incentives for international piracy. Diffe-
`rences in seasonal timing involving the start of the
`“fall” semester
`in the southern and northern
`hemispheres may create the need for timed release of
`college textbooks.
`
`
`
`

`
`
`
`12
`
`Parallel import of copyrighted works acquired
`abroad interferes with copyright owners’ ability to
`exploit their works within a region through control
`over when a work is first distributed and through
`coordination of the initial distribution with pre-
`release publicity. The importation of copies made and
`acquired abroad undermines the copyright owner’s
`exclusive right to control the manner and timing of
`their U.S. distribution.
`The problem is particularly heightened for works
`that follow a sequential distribution pattern for
`different formats or media, as well as for different
`geographic markets. The release of hardback and
`paperback versions is routinely staggered. A work
`first distributed or released abroad may progress to
`paperback version in that market while the title is
`still in hardback domestically. Parallel imports of
`paperback versions interfere with the U.S. copyright
`owner’s right to exploit fully the “window” for
`hardback release.
`2. Pricing
`copyright
`Parallel
`imports also undermine
`owners’ ability to exercise their right to control the
`pricing of their works, a critical component of the
`distribution right. Wide price variations between
`domestic and international markets for copyright-
`based products are important and necessary for
`copyright-based industries to exploit their products
`internationally, to further develop
`international
`markets, and to mitigate the potential piracy that
`
`
`
`

`
`
`
`13
`
`would result were such works not available in local
`markets at local prices. Such price variations are the
`result of local demand, local ability to pay, local
`taxes, local regulations and international treaty
`obligations, local manufacturing and distribution
`costs, piracy concerns, and local infrastructure.
`As copyright-based industries enter and develop
`new markets, they price products to make them
`attractive to local consumers, while permitting the
`industries to generate positive net income. This
`pricing structure is made economically viable by the
`relatively low marginal cost of creating additional
`copies of copyrighted works compared to the signifi-
`cant expense of creating the work itself (together
`with its initial production costs, editing, layout, etc.).
`Some publishers—in order
`to make products
`affordable in local markets, encourage education,
`discourage piracy, and build literacy and good
`relations—may create special editions of textbooks at
`lower prices for foreign markets. (For example, some
`textbooks created initially for the U.S. higher
`education market are sold in cheaper editions, with
`different paper, few colors, less illustrations, etc., for
`markets in India and China).
`By strategically pricing products, copyright-based
`industries encourage local demand and development
`of local infrastructure for such products. This has at
`least two significant benefits. First, it encourages
`further creative activity by promoting markets from
`which copyright owners, which have made a
`significant investment in producing works, can
`
`
`
`

`
`
`
`14
`
`recoup such investment. Strategic pricing serves one
`of the fundamental purposes of the Copyright Act—
`to promote creative expression by allowing copyright
`owners to realize economic benefit from their
`creations. Second, development of local demand for
`copyrighted works promotes the wide dissemination
`of copyrighted works. Strategic pricing serves the
`principal purpose of the Copyright Act—“promoting
`broad public availability of literature, music, and the
`other arts” and thus creates a private incentive “to
`stimulate artistic creativity for the general public
`good.” Twentieth Century Music Corp. v. Aiken, 422
`U.S. 151, 156 (1975).
`The downside to the variation in pricing between
`the domestic and international markets is that it
`incentivizes third parties to export to the U.S. copies
`made (and perhaps distributed) under foreign law
`abroad,
`thus
`invading
`the copyright owner’s
`exclusive right to distribute in the United States.
`The incentive and ability to exploit price differentials
`through cross-border movement of copies is likely to
`only increase in the future, as language barriers
`throughout the world continue to erode, and English
`increasingly becomes a lingua franca.
`Importation and distribution of copies acquired at
`reduced prices abroad derogate from the Copyright
`Act’s mandate of enabling the copyright owner to
`control the pricing and distribution of works.
`
`
`
`

`
`
`
`15
`
`3. Content
`Because of the varying cultural appeal of many
`copyright-based works, owners may distribute their
`works with varying content in different national
`markets. Due to censorship, threatened boycotts, or
`marketing considerations, a title in one market may
`have varied content from the U.S. release. A short
`story collection released in England may contain a
`work about abortion that might effectively prevent
`its use in schools in South Dakota or Kansas. A
`compact disc released in a foreign country may
`contain different or additional “tracks” than a similar
`recording by the same artist released in the United
`States. Yet if the price differential is sufficient,
`versions released for foreign distribution will likely
`be imported to undersell similar copyrighted works
`distributed domestically. Importation of copies
`intended for audiences abroad interferes with the
`copyright owner’s creative decision concerning what
`to distribute in a given market and displaces sales
`benefitting U.S. copyright owners.
`C. Plain Language and Structure.
`Over-reading § 109 without much attending to
`§ 602 is like presenting Hamlet without the ghost.
`The wrong complained of
`is actionable under
`§ 602(a)(1) and § 501, and analysis necessarily begins
`by asking first what § 602(a)(1) means, not what
`§ 109 means. Unfortunately, Kirtsaeng reads a
`latent ambiguity into the importation prohibition
`where there is none. But careful attention to the
`
`
`
`

`
`
`
`16
`
`structure of § 602(a)(1) and § 501 and review of the
`legislative history underlying § 602(a)(1) makes plain
`that Congress intended it to have the broad reach its
`plain text commands, providing copyright owners
`with protection, absent their consent, from the
`importation of copies—whether piratical or not—
`acquired abroad and made under foreign law for use
`abroad.
`The structural evidence from 17 U.S.C. § 501. In
`§ 501, Congress treated unauthorized importation as
`an infringing act distinct from the violation of § 106
`rights:
`Anyone who violates any of the exclusive
`rights of the copyright owner as provided by
`sections 106 through 122 or of the author as
`provided in section 106A (a), or who imports
`copies or phonorecords into the United States
`in violation of section 602, is an infringer of
`the copyright or right of the author.
`That § 501’s infringement cause of action treats
`importation separately from distribution argues for
`the inapplicability of § 109 to a claim for infringing
`importation, as Justice Stevens’ opinion in Quality
`King noted. 523 U.S. at 145-46. Pointing in the same
`direction is the text of § 109, which specifies that it
`applies “notwithstanding the provisions of section
`106(3) . . . .” Congress could have, but did not, specify
`that § 109 applies “notwithstanding the provisions of
`§ 106(3) and § 602,” or that § 602(a)(1) is “subject to”
`§ 109. Instead, § 109 applies “notwithstanding the
`
`
`
`

`
`
`
`17
`
`provisions of section 106(3)” alone, and does not
`include “importing” among the actions (selling or
`disposing of possession) that the owner of a copy
`“lawfully made under this title” may take.5 Id. at
`136-37.
`from 17 U.S.C.
`evidence
`structural
`The
`§ 602(a)(3). Additional evidence is supplied by the
`express exceptions Congress crafted.
`Had the first sale doctrine generally applied to
`imported copies, as Kirtsaeng contends, those
`exceptions would have been unnecessary. Indeed, all
`three carefully crafted exceptions (for governmental
`use, scholarly and educational use, and the so-called
`“suitcase exception”) involve previously sold copies,
`but only a small subset of them.
`Congress’s exceptions open th