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U.S. Supreme Court to Review 'Gray Market' Imports Again

posted on by Lynzee Loveridge

The United States Supreme Court will hear a case against University of Southern California graduate student Supap Kirtsaeng on the issue of "gray market" or "parallel market" imports — imports that are unauthorized by the original maker, but are not necessarily illegal. The case could have ramifications for Japanese manga and anime goods that are imported into the United States without permission from the original makers, but are otherwise legal.

Kirtsaeng helped make ends meet by requesting his family in Thailand to send him internationally manufactured textbooks. He then resold the books on eBay to American buyers for profit. John Wiley & Sons, whose Asian arm published a number of the items sold by Kirtsaeng, filed an infringement suit in a Manhattan federal district court in 2008. A jury agreed with John Wiley & Sons, finding Kirtsaeng liable for $600,000 dollars in damages for infringement on eight works.

According his petition to the Supreme Court, Kirstaeng researched the first sale doctrine of U.S. copyright law, which allows the owner of a lawfully produced work to resell the work without the authority of the copyright owner.

In a similar 2008 case over imported textbooks, a United States District Court ruled that the first sale doctrine did not apply to imports. The Court of Appeals for the Ninth Circuit also ruled that the first sale doctrine did not apply when Swiss watch manufacturer Omega brought retailer Costco to court in another case in 2010. The Supreme Court affirmed the Costco vs. Omega decision, but only by a 4-4 deadlock (with one recusal from the newest justice, Elena Kagan).

In Kirtsaeng's case, the Supreme Court will have to decide whether U.S. copyright protection applies to items that are made abroad, purchased abroad, and then resold in the U.S. without the permission of the manufacturer.

It is estimated that companies such as eBay, Amazon, Target, and Costco create a $63 billion annual market for 'grey market' goods.

The case will be argued in court this fall.

Thanks to Daniel Zelter for the news tip

Sources: Yahoo! News, Reuters via Slashdot

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