Thursday 18 August 2011

Can I Sell a Used Book Without Breaching Copyright?

The title of this post poses a question that seems to have a laughably obvious question. After all, I walk past a used bookstore on my way home from work every day. You may be surprised by the answer.

In Canada, broadly speaking, intellectual property rights are subject to the doctrine of first sale, also known as exhaustion. In simple terms, this means that once someone purchases an item from its creator, the creator has been paid and the purchaser is free to resell it. This doctrine often comes under fire because companies want to control  the manner in which their products are sold.

One way manufacturers tend to do this is by adopting different sales strategies in foreign markets. For example, a watch manufacturer may want to sell the same watch at a lower price in a less wealthy country while charging a premium to domestic retailers. This gives brands access to smaller markets that they would otherwise be priced out of. Additionally, some manufacturers may want to liquidate excess stock outside of prime markets to avoid dilluting their brand.

The doctrine of first sale has recently been eroded it two areas. First, as digital content becomes the norm it has become less relevant. It is common for licenses to place restrictions on the resale of software and in digital market places everything is software. License limitations have therefore expanded into copyright of books and music in the form of websites, ebooks and mp3s.

Another limitation to the first sale doctrine that has recently developed in the United States addresses the grey market directly. Two recent cases in the United States have narrowed the scope of this doctrine to copyrighted works created in the United States leading naturally to the question, where does Canada stand?

There is little Canadian jurisprudence dealing with the first sale doctrine. However, in one recent case the federal court dealt with importation of works protected by copyright.  It clarified that in Canada, we have a doctrine of "domestic exhaustion". That is to say, the first sale doctrine only applies when an item is sold domestically. This is because copyright is not limited to protecting creators from unauthorized copying. Copyright holders have a number of rights including the exclusive right to import their works for sale. As a result, grey market importation of a work protected by copyright, in certain circumstances, is a breach of that copyright. In the context of books, there are some specific nuances that apply to exclusive distributors of books. I will not delve into these here. To sum up, it may in fact be a breach of copyright to resell a legally purchased foreign edition of a book.

I doubt that this has any serious implications for the typical used book store since little of their stock is likely to be foreign or sufficiently valuable to sue over. Does anyone out there know if this has any effect on collectors of rare editions? Are they concerned that, for example, an English author may sue a collector who sold a signed first edition from the United Kingdom in the United States? Is anyone out there aware of a case in any jurisdiction where this has been considered?

Sources
Mike Masnick via Techdirt, Legally Bought Some Books Abroad? Sell Them In The US And You Could Owe $150k Per Book For Infringement http://bit.ly/pqIxWH
Stikeman.com, Copyright Act May Help Thwart Grey Market:  http://bit.ly/oEVqwf
Kraft v. Euro Excellence via Canlii: http://bit.ly/ncQwY0
Copyright Act, s. 27 and 27.1 via Canlii: http://bit.ly/ni9VuU

 The views expressed in this blog may not be consistent with those of McCarthy Tetrault LLP or its clients. The information provided here is for educational purposes only. Every legal issue is unique, please contact an expert if you think you might need legal advice.

1 comment:

  1. Thank you for sharing this information! I have a similar situation, but instead of a book it's a car and between neighbors. Yeah it's not pretty, we are considering a lawyer in Calgary. We need the best possible way to solve this where everyone goes home happy.

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