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Controversial Supreme Court decision has publishers up in arms

In a 6-3 decision this month, the United States Supreme Court announced what is now being considered a controversial decision by textbook companies that hold U.S. copyrights but sell their products overseas. The court's decision hinged on two questions: had there been a violation of copyright law and what sort of affect could this case have on future incidences?

In the court case, John Wiley & Sons, a textbook publishing company, sued a former USC student who they claimed purchased their books overseas then proceeded to resell them in the U.S. at a profit. Feeling that this was a violation of the company's copyright protection laws, the publisher took the student to court, eventually being awarded $600,000 in damages.

But the Supreme Court disagreed, ultimately reversing the decision in favor of the student. Despite what appeared to be a clear intellectual property dispute, the court claims that the student's interpretation of the law was correct, pointing out that the holders' rights expired when the copyrighted material was lawfully sold overseas. Because of the "first sale" doctrine, "a copyright holder has a right to profit from the first sale of a book, but not its resale."

Despite the court's seemingly sound ruling, the decision may have created a volatile situation when it comes to selling products overseas. Because a majority of American companies sell their products overseas-sometimes at significantly lower prices-this leaves resellers with the option of profiting considerably. Although a company's copyright laws offers them protection from piracy, the issue of resale can be a bigger problem when it comes to cutting into a company's profit margins with their products.

Source: The Los Angeles Times, "Supreme Court issues major copyright rulings on foreign sales," David Savage, March 19, 2013