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Jim Burger talks to InsideCounsel about copyright pitfalls of gray market goods

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June 6, 2013

InsideCounsel magazine quoted Lobbying & Policy partner Jim Burger in a recent story about the thorny intersection of imports and copyright law. At issue are copyright protections for “gray market goods,” the term for lower-priced items that are sold overseas but often end up back in the U.S. supply chain.

Copyright holders had hoped to retain copyright protections for their products after they enter the U.S. market. But the U.S. Supreme Court’s March 19 decision in Kirtsaeng v. John Wiley & Sons, Inc. changed all that. In the 6-3 ruling, the high court rejected the claims of a publisher that pursued a copyright infringement action against a student who re-sold its lower-priced textbooks in the U.S. for a profit. The first-sale doctrine applies to copies of a copyrighted work lawfully made and sold abroad, the court ruled.

One solution for publishers may be a tactic widely used by software companies, Burger told InsideCounsel. Software companies contend they don’t sell copies of their software; they just license the copies. “Overall, the courts have upheld software licenses and ruled they are not sales,” Burger said.

Most publishers already license digital books, he noted. For hard-copy books, Burger said publishers could try to avoid first sale by attaching written licenses to shrink-wrap, warning consumers that by opening the package, they agree to the term of the license.