Wednesday, March 27, 2013

Kirtsaeng II, the Dissent

Kirtsaeng, discussed in this prior post, was not unanimous. Justice Kagan wrote a concurring opinion in which Justice Alito joined. Justice Kagan's main point is to recognize that the Court's decision significantly narrows the ban on the unauthorized importation of copyrighted works found in 17 U.S.C. § 602(a)(1). She believes, however, that the source of that problem is not the decision in Kirtsaeng, but the prior decision in Quality King v. L'Anza, which upheld the notion that the first sale rule trumps the ban on importation.

Justice Ginsberg wrote a dissenting opinion in which Justice Kennedy Joined and Justice Scalia joined in part. In Justice Ginsberg's view, the Court should not have embraced the theory of international exhaustion of copyright. Further, the dissent suggests that the "parade of horribles" the majority envisions are largely imaginary.

Regarding the scope of the first sale doctrine (i.e., "exhaustion"), the dissent notes that the Court in the prior Quality King case distinguished between copies of works made in the United States and copies made abroad. The Quality King Court stated that copies made abroad are not made "under" the U.S. copyright law and, therefore, the first sale rule does not apply. The majority dismissed this part of Quality King as not necessary to the prior holding and, therefore, not controlling here. Justice Ginsberg, however, would have held, consistent with that language in Quality King, that the first sale rule of section 109 does not apply to copies made outside of the United States. Doing otherwise, she stated, reduces the scope of the importation ban to cover only "larcenous lessees, licensees, consignees, and bailees of films and other copyright-protected goods." According to the dissent, that is not the scope of protection Congress intended to provide to copyright holders.

A final--and, for this blog, interesting--aspect of the dissent is the point that the United States clearly does not want the importation ban to be so limited. Evidence of that is that the U.S. has adopted the position in international trade negotiations that countries should have the right to bar the importation of copies of copyright works sold abroad. The U.S. advanced this argument at the WTO in conjunction with the Agreement on Trade-Related Aspects of Intellectual Property ("TRIPS"). Justice Ginsberg stated that she would "resist a holding out of accord with the firm position the United States has taken on exhaustion in international negotiations."

If this is truly the firm position of the United States, it is fair to assume that Congress may take up this issue. If that happens, we may see a legislative effort to put some teeth back into the ban on the unauthorized importation of copyrighted works.

Lastly, in my first post on this case, I mentioned a that there was something interesting about the district court judge in this case. The case was first heard in the Southern District of New York by Donald C. Pogue, Chief Judge of the U.S. Court of International Trade. As I have mentioned in the past, judges of the Court of International Trade are appointed by the President for life under Article III of the Constitution. As such, they are fully empowered district court judges who can, when given permission by the Chief Justice, sit by designation in any federal court that wants them. CIT judges provide an important service to the judiciary and the public by serving as judges in the various district and circuit courts around the country.
 

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