Yesterday, PG had a post about a Publishing Perspectives piece discussing a New York Times article condemning Amazon’s sale of “counterfeit books,” many of which originated overseas.
An alert commenter to that post mentioned a U.S. Supreme Court case that may be relevant, Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013)
PG won’t go into detail about the case, but the gravamen of the holding was that Mr. Kirtsaeng, who, through friends/family, purchased new English-language Wiley textbooks in his home country of Thailand, could legally resell those books in the United States.
The books purchased in Thailand were legitimate copies published and distributed by the Asian subsidiary of Wiley, WileyAsia. WileyAsia’s books stated that they were not to be taken (without permission) into the U.S.
The Supreme Court ruled in favor of Kirtsaeng, grounding its decision a provision of U.S. copyright law generally referred to as the “First Sale Doctrine.”
[S]ection 109(a)’s “first sale” doctrine, … provides that “the owner of a particular copy or phonorecord lawfully made under this title … is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”
Without the First Sale Doctrine, there would likely be no used book stores in the United States.
A new book store acquires the right to sell new books via the publisher which has a publishing contract with the author, who is (or should be) the owner of the copyright to the book. Under the publishing contract, the author grants the publisher the right to make copies of the author’s book and sell them (directly or through distributors) to bookstores which, of course, can sell those new books to readers.
After a copy of the new book is sold to a reader, the author’s rights to that particular copy of the book are exhausted. The purchaser can lend it, resell it, donate it, etc., without violating the author’s copyright.
To be clear, the purchaser of a copy of the book cannot make copies of the book to give or sell to others, because the First Sale Doctrine applies only to that particular copy of the book the purchaser legally acquired.
So, when Mr. Kirtsaeng purchased multiple copies of the English language textbook in Thailand and resold them in the United States, the Court held that the Thai purchase was the First Sale of each textbook and Mr. Kirtsaeng was effectively in the same position as a used book store operating in the US.
Back to the NYT condemnation of Amazon for selling “counterfeit books,” it is possible that Amazon is doing so. However, it is also possible that Amazon (or third-party sellers on Amazon) is/are acquiring books from foreign publishers in the same way that Mr. Kirtsaeng was acquiring the Wiley textbooks.
If a U.S. publisher decides to permit foreign publishers to print, publish and sell books in the English language for a cost/royalty that is lower than the price the U.S. publisher charges its U.S. customers for the same text, that’s a business decision for the U.S. publisher to make (and, incidentally, that the author has no control over under typical publishing agreements).
If a foreign publisher decides to sell English language copies of a book at a much lower price than the price set for English language books in the U.S. and has a contract with the U.S. publisher that sets no price limits for the book (which might be a violation of antitrust laws somewhere), the foreign publisher can set the price and make the sale directly or through distributors or bookstores.
Under Kirtsaeng and the First Sale Doctrine, once the foreign publisher sells a copy of the book, under U.S. copyright law, the wholesaler, retailer or other purchaser of that copy can do anything with it that a purchaser of the same book from the U.S. publisher could do in the U.S., including resell the new book or ship it to the U.S. or any other destination for resale.
(A contract between a publisher and distributor could impose geographical limits on where the distributor could offer the book for resale, but once the book is sold at retail, First Sale definitely kicks in. PG has no idea what might happen legally if each bookstore required each purchaser of a book to sign a contract agreeing not to resell or give the book away. From a commercial standpoint, PG suspects such a requirement would dampen sales of the book.)
Is there a solution to counterfeit or unauthorized books?
In PG’s internationally-celebrated humble opinion, requiring Amazon to determine whether books that an Indian or Chinese publisher delivers directly to Amazon or via a U.S. book distributor or other intermediary are properly authorized by the party who owns or controls the copyright is an unreasonable burden to place upon Amazon or Barnes & Noble or Shirley’s Books located on Main Street, USA.
PG does think Amazon’s idea for the establishment of a central database that permits sellers to know if a publisher in the U.S. or anywhere else is authorized by the copyright holder to create and sell a particular book is a good idea. It’s not a complete solution, but a practice that would diminish the flow of improperly licensed books through commercial sales channels.
What organizations are in the best position to create such a database and populate it with accurate data?
And, in particular, large publishers, including large international publishers. They know who holds rights to the books they publish in various geographical areas. They know who has translation rights in those same areas. They and their authors bear the largest losses from pirated copies of their books in various nations and languages.
In conclusion (finally), PG asks a rhetorical question:
How likely is it that Penguin Random House will lead such an effort to create a central database of literary rights and permissions and put up a significant share of the costs necessary to do so?
Pearson? ThomsonReuters? Wolters Kluwer? Hachette Livre?