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December 3, 2022

Wiley Takes Their Dislike of Resellers All The Way to the Supreme Court

Those of you formerly or currently studying for the CPA exam have probably held a Wiley CPA Review book in your hands at some point. Did you ever wonder why the paper was so thin and seemed cheap? Did you think it was your fault when your FAR book magically disintegrated right around the time you finished studying for that section?

I'm going to tell you a secret: Wiley uses thin paper and tear-off margins on purpose. They do it so you can't turn around and sell your used books to someone else when you're done with them since chances are the books will have fallen apart by then and no one wants to pay good money for a torn up book. A high quality binding with strong paper might last 2, 3, even half a dozen CPA exam candidates but cheap, thin newsprint and perforated margins mean the book might serve the needs of the one candidate who purchased the materials directly. Genius, ain't it?

But Kirtsaeng v. John Wiley & Sons takes Wiley's copyright protection just a tad further than their brilliant printing tricks. Wiley makes a whole lot more than CPA review materials, of course, and this case could impact reselling of all kinds of stuff, including iPhones and laptops. Potentially, we could be talking about FBI raids of your yard sale (yes, that sounds as ridiculous as it is). Safe to say this could be really, really bad.

A little backstory: in 1997, Supap Kirtsaeng came to the U.S. from Thailand to study at Cornell. As we all know, college textbooks aren't cheap and Kirtsaeng discovered that he could buy his Wiley-produced textbooks for way cheaper in Thailand and had his family ship them out.

Court documents show that Kirtsaeng had $1.2 million in PayPal revenues from seeling the books on eBay; that was slightly more than the $900,000 in revenues he initially claimed. That seems, er, a tad excessive but who knows, maybe he was taking a quadruple major and needed a lot of books. Even if the books were significantly cheaper in Thailand, how the hell did he make that kind of money?

Wiley admitted that it did, in fact, charge less for books sold overseas than here. In case we didn't already know that.

At issue, the first sale doctrine, which basically says that if you legitimately purchase, say, a FAR book directly from Wiley, you can then turn around and sell that book to someone else. You cannot make 25 copies and sell those too but that one book you paid for is yours to sell, give away, burn, whatever. It's yours.

The first sale doctrine, codified at 17 U.S.C. § 109, provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner. The right to distribute ends, however, once the owner has sold that particular copy. See 17 U.S.C. § 109(a) & (c). Since the first sale doctrine never protects a defendant who makes unauthorized reproductions of a copyrighted work, the first sale doctrine cannot be a successful defense in cases that allege infringing reproduction.

The tricky part here is that Kirtsaeng's family bought the books overseas. The U.S. Court of Appeals upheld a lower court's ruling in 2011 that only American-made products were subject to the first sale principle. That's where it gets weird; how many things are made in America these days? For all intents and purposes, we can pretty safely assume that even if Wiley had the books in question printed in China, they only care that materials intended for a certain country at a certain price point remain in that country or – more importantly – that someone isn't making money off of their resale in other markets.

Anyone else getting a creepy Revelation vibe here? "And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name."

So if you have CPA review materials you don't need sitting around, now might be the time to sell them before this gets way out of hand.

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